If Republicans will not go along with tax hikes on the wealthy, then Geithner Willing To Go Over Fiscal Cliff.
Treasury Secretary Timothy Geithner said Wednesday that the Obama administration was willing to allow the economy to go over the fiscal cliff if Republicans did not agree to raise tax rates on the wealthy. In an interview with CNBC, Geithner drew a harder line in the sand than the White House previously has articulated. "There is no prospect of an agreement that doesn't involve those rates going up on the top 2%," he said. The Treasury Secretary repeated President Barack Obama's tough line that he would not negotiate with Republicans if they held the economy "hostage" to threats that the debt ceiling would not be lifted. At the same time, Geithner tried to sound optimistic that the two sides would reach a deficit-reduction framework. "I think you see the broad outlines of a framework now look more inevitable," he added. Reports to the contrary were "orchestrated drama."
Earlier today the ECB left its benchmark rate at a record low .75% stating the rate was "very accommodating". What's more interesting is the ECB's Significant Downgrades To Growth And Inflation Forecasts.
The ECB downgraded its 2012 GDP forecast to a range of -0.6% to -0.4% from -0.6% to -0.2% previously, its 2013 GDP forecast to a range of -0.9% to 0.3% from -0.4% to 1.4% previously, and said its 2014 GDP forecast was for a range of 0.2% to 2.2% growth in the euro area.
On inflation, the ECB forecasts 2.5% inflation in 2012 versus a range of 2.4% to 2.6% previously. 2013 inflation forecasts were lowered to a range of 1.1% to 2.1% from 1.3% to 2.5% previously. In 2014, the ECB sees inflation in a range of 0.6% to 2.2%.