Jean-Claude Trichet just wrapped up his last press conference has head of the ECB.
Not surprisingly, the market tanked during his speech, as his focus on inflation, and lack of willingness to do more disappointed investors who remain freaked out about the crisis.
This is classic Trichet. We can’t remember a time when the market didn’t tank during one of his press conferences.
And beyond a certain tone-deafness, he also made bad decisions.
In 2011, with the PIIGS crisis worsening, he hiked interest rates because he got spooked by rising oil prices.
It should sound familiar. He did the exact same thing in 2008 as the banking crisis was worsening, focusing on prices, rather than the threat of imminent collapse. That year ended in tears, as this one is.
Here’s the path of what happened in 2008, as he hiked rates into into the peak.