<<Why has the ECB refused to cut rates? What do they know?>>
Looks as if everyone is questioning the ECB level of knowledge, but as to "why"; plainly to show they aren't about to be shoved by the US Fed. That the US Fed. & eht ECB are no longer singing from the same sheet, our chances might just be improved.:
Monday April 2, 5:59 am Eastern Time
IMF's Koehler sees room for U.S., ECB rate cuts
(UPDATE: Recasts with further quotes, background)
By Nick Antonovics
BERLIN, April 2 (Reuters) - International Monetary Fund Managing Director Horst Koehler said on Monday there was room for cuts in U.S. and euro-zone interest rates and gave warning of a cut to the Fund's European 2001 growth rate forecast.
Koehler said the IMF saw 2001 growth in the euro economies of 2.5 percent compared to the 3.4 percent it has been forecasting. However he played down fears of world recession, saying the Fund saw global growth this year of three percent.
``The U.S. has, through aggressive interest cuts, correctly demonstrated decisiveness and, if need be, has further room for manoeuvre,'' Koehler said according to a prepared text to be delivered to German parliamentarians.
``An ECB rate cut would undoubtedly be helpful for the European economy,'' he added.
The comments came just days after the ECB reaffirmed its wait-and-see monetary stance. On Friday the central bank issued an unusual unscheduled statement aimed at deflating speculation it was leaning towards an interest rate cut and explicitly reiterating its monetary policy remained on hold.
The ECB has kept its key 4.75 percent minimum bid rate unchanged since last October.
At a separate event in Amsterdam on Monday, Bundesbank Vice President Juergen Stark insisted on the autonomy of ECB policy from the response of U.S. authorities to developments in their economy.
Stark, who doesn't have a say in ECB monetary policy, said the bank was pursuing a strategy geared to European conditions and was not ``sailing in the wake'' of the U.S. Federal Reserve.
``Up to the present, it (the ECB) has pursued a policy of 'steady as she goes','' he said according to the text of a speech distributed to the media in Frankfurt.
``Hectic responses by central banks transmit themselves to the markets and increase volatility,'' he added.
LITTLE RISK OF WORLD RECESSION
Koehler said the IMF was likely to cut its 2001 forecast for European growth to 2.5 percent but said the region was still likely to outgrow the U.S. for the first time in many years.
He described the world economy as being in ``a critical phase'' but said it should be able to avoid recession and post a three percent growth rate this year -- albeit down on the 4.8 percent recorded last year.
``Above all, there is enough room for economic policy and other measures to counter the risk of recession,'' he said, noting inflationary pressures were not an issue at the moment.
He noted that the current crisis in Turkey, sparked off by a row between Prime Minister Bulent Ecevit and President Ahmet Necdet Sezer, was evidence of the need for political stability to underpin the economy and called on the government to make reforms such as strengthening its banking sector.
``I don't accept that global capital markets take primacy over politics, but on the other hand politicians must realise that in open economies political stability is the key to winning investor confidence,'' he said.
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