European Central Bank President Jean-Claude Trichet said on Friday he saw price stability in the medium term but warned about longer term inflation expectations. "Measures of long term inflation expectation derived from financial market indicators remains relatively high. While such measures always need to be interpreted with caution, their development calls for particular vigilence," he told an international financial forum in Paris. Trichet said if oil prices remained high, inflation would probably remain above two percent for longer than was expected this year and possibly in the first half of next year. "Looking beyond the short term, however, the main scenario for medium term inflation remains consistent with price stability. |||