Central banks world-wide cannot sacrifice their hard-won credibility in the face of high oil prices that continue to threaten price stability, Trichet told a news conference.
"We need to solidly anchor inflationary expectations. Each central bank has to see what is the appropriate policy to anchor inflationary expectations," he said after a regular meeting of central bankers from the Group of 10 rich nations plus key emerging economies. "We have to remain credible."
Trichet's comments echo signals by leading central banks that the era of cheap money is ending as a world economic recovery broadens and the spectre of an oil-price driven inflationary cycle hovers over most of the globe.
The US Federal Reserve has raised rates 12 times already and more hikes are expected. The Bank of Japan has signalled that 2006 is likely to be the year when it moves.
And the European Central Bank, of which Trichet is president, has used increasingly hawkish references to the inflationary environment and stands ready to raise rates as needed. "Interest rates can move any time," he said.
"We have a high level of energy prices and it has big impact on headline inflation," Trichet said.
Oil prices that had jumped to a record $70.85 a barrel shortly after Hurricane Katrina struck the US Gulf coast in August were well below $60 on Monday. But there were still concerns about steady demand from China's booming economy and the winter heating season in the northern hemisphere.
Beyond oil, other risks persisted, Trichet said, including the US current account deficit and the threat that protectionist trends could hamper the trade flows that have helped to keep the global economy humming.
"It is certainly not to be concluded global imbalances are not a risk to the world economy," he said. "Perhaps there is underestimation of risks by financial markets."
One possible factor mitigating inflationary pressures for the time being was the globalisation of markets for manufactured goods and services, which had dampened price rises, he said.
But it remained an open question whether those long-term disinflationary factors were now abating, Trichet said, a prospect that outgoing US Federal Reserve Chairman Alan Greenspan raised recently.
Turning to the foreign exchange markets, Trichet stressed that monetary policy leaders in the G10 group favoured exchange rates that reflected economic fundamentals and welcomed China's recent move to revalue its currency, the yuan, in July.
"There is quite a large consensus," he said. Trichet's message echoes that of G7 finance ministers and central bankers at a meeting of the International Monetary Fund in Washington in September, who welcomed China's long-awaited move.