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Fed's Bullard Says Inflation is "Real Possibility"

Deflation is a real possibility in the current environment, according to St. Louis Fed President James Bullard, while speaking at an event hosted by the French Central Bank in Paris on Friday.The central banker said that if people begin to anticipate negative inflation due to a longer-than-expected global recession, the phenomenon could spark a downward spiral in prices, resulting in a deflationary environment.In January, the Federal Reserve projected GDP in the United States will decline between 0.5%

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Financial Crisis Creating "Gaping Hole" in Economy, Says ECB's González-Páramo

Frankfurt - While inflation expectations are anchored, the current financial crisis is creating a gaping hole in the real economy, European Central Bank member José Manuel González-Páramo said.This is true not only for the euro area but for large economies at large, González-Páramo said at a conference in Madrid, Spain on Friday.The central banker also noted that some countries within the euro zone were in a weakened financial position due to the crisis. However, he stressed that preserving

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ECB's Trichet Sees No Further Need for Stimulus Boost

Frankfurt - Europe isn't in need of further increases in spending to counteract the current global financial crisis, European Central Bank President Jean-Claude Trichet said.Speaking in an interview with the Wall Street Journal published on Monday, the central banker said that, instead, governments should act more quickly on measures already announced, making partial reference to the delays in the U.S. government's bank rescue.Nothing will really work until the financial sector is back on track and ready to lend

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ECB's Wellink Says Market Conditions Remain "Fragile"

Market conditions remain fragile, and a recovery in the banking system appears to be a long way off, with more countries entering recession, Dutch central banker Nout Wellink said on Friday.Speaking at an event in Amsterdam, Wellink, who also sits on the European Central bank's Governing Council, called for a global solution as a means of resolving the turmoil, saying the current crisis resolution framework has had little effect in fighting the turmoil thus far.The economic recovery

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ECB's Ordonez Says Structural Reforms Needed in Spain

Frankfurt - European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said the global crisis is of a large magnitude and that reforms in Spain are needed to bring growth back to pre-crisis levels.Speaking at an event in Madrid on Tuesday, Ordonez also said delays in structural reforms are discouraging investment in Spain and that the country's credit problems will be best solved through loan guarantees and payment waivers. Ordozez added that Spain also needs ordered bank

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ECB's Stark Says Global Economy in Deepest Slump Since WWII (Update)

Frankfurt - European Central Bank member Jürgen Stark said the world economy is in its deepest slump since the Second World War and said that it is difficult to predict when it will end.The year 2009 will be a very difficult year, Stark said at the fifth German-Luxembourgish Economic Conference in Luxembourg on Monday. Policy makers need to prevent a further deterioration in economic and financial conditions.However, central banks alone cannot solve the crisis, Stark said, adding that

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Global Economy in Steep Downturn, Says ECB's Weber

Frankfurt - European Central Bank Governing Council member Axel Weber said the global economy is in a deep slump and noted downside growth risks, including ongoing financial market turbulence.Because of the declining demand for exports, the German economy will be particularly strongly affected, Weber said at the Bundesbank following the central bank's annual report. Earlier on Tuesday, the Federal Statistics Office reported that German exports fell 4.4% month-over-month and 20.7% year-over-year in February to €66.6 billion. The central

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ECB's Ordonez Expects Sizable Spanish Recession, Weak Credit Growth

Frankfurt - Citing Bank of Spain forecasts, European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said the data point to a sizable recession, which will lead to very weak, and even negative credit growth.In any of the possible scenarios in which we emerge from this crisis, credit conditions will necessarily have to be more limited and more restrictive than before the crisis, Ordonez said while speaking to a parliamentary commission in Madrid on Wednesday.Regarding the financial

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ECB Monthly Bulletin Notes Below-Target Inflation, Deteriorating Global Demand

Frankfurt - Euro zone inflation is expected to remain well below 2% this year and the next, while both global and domestic demand will continue to deteriorate in 2009 before gradually recovering, the European Central Bank said in its monthly bulletin, echoing ECB President Jean-Claude Trichet's introductory remarks.At its March 5 policy meeting, the ECB Governing Council voted to cut its main refinancing rate 50 basis points to a record low 1.5%. The central bank also released its

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ECB's Ordonez Says Euro Providing "Immense Benefits" to Euro Zone Members

Frankfurt - The euro is providing immense benefits to the members of the monetary union, shielding them from the effects of the current financial crisis, European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said on Friday.Speaking at a conference in Madrid, Spain, the central banker warned that nationally-focused crisis solutions are doomed to fail and called for a higher level of European integration as a way to help boost economies out of their current slump.Responses based

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