Trichet Will Lower Interest Rates

The US recession will cause a slowdown in Europe and will cause the ECB to cut rates. According to the web site, European Commission - External Trade - Trade Issues at

(http://ec.europa.eu/trade/issues/bilateral/countries/usa/index_en.htm)

"The EU and the US are each other's main trading partners... In the year 2005, the total amount of two - way investment was over 1.6 trillion Euros... In the year 2006, exports of EU goods to the US amounted to 269 billion Euros."

Since the US economy is slowing, European economies are likely to feel the pinch. Also with the strength of the Euro vs the dollar and the American consumer pulling back, travel by Americans to Europe will fall off, another head wind. All of this points to an economic slowdown in Europe which will then lead to lower rates by the ECB. Trichet's line on holding rates steady is not likely to continue much longer.