March 3 (Bloomberg) -- Central banking has been a duller than usual job for several months now. That's about to change, as shifts in the economic outlook throw up tempting new options.

Europe's Jean-Claude Trichet, Japan's Toshihiko Fukui, the U.K.'s Mervyn King and Alan Greenspan of the U.S. have all been living on Easy Street, albeit for different reasons.

Trichet, for example, hasn't had to steer up or down since taking charge of the European Central Bank in November 2003. As an economic coma threatens Europe even with the benchmark rate at a six-decade low of 2 percent, Trichet may have to cut at a time when his instincts say it's time to raise borrowing costs.

He'd probably be cutting rates already if he only had to worry about Germany and Italy, which account for half of his $10 trillion domain and endured contracting economies in the fourth quarter. With annual inflation slowing to 1.9 percent in January, the ECB's 2 percent target rate is no obstacle. German unemployment at a postwar high is a powerful motivation.

Fourth-quarter growth rates of about 0.8 percent from France and Spain, the euro region's second- and fourth-biggest economies, show the difficulties of picking the right gear for a multispeed grouping of 12 nations. Even with the French economy growing, unemployment jumped to a five-year high of 10 percent there last month, undermining hopes that the euro area will match or better last year's 2 percent growth in gross domestic product.

Signs of Life

At the Bank of Japan, Fukui has also presided over unchanged rates since landing the top job in March 2003. As signs of life in Japan's economy drive the Nikkei 225 Stock Average to an eight- month high and push 10-year government bond yields to their highest since November, policy makers are itching to move borrowing costs up from near zero.

Fukui told the Japanese parliament last month that the central bank plans an April review of its policy of making 30 trillion yen ($286 billion) to 35 trillion yen available to lenders as its life-support system for the banking system. Earlier this week, he said the bank is studying bond yields to see ``if financial markets are excessively factoring in expectations that policy may be maintained for a long time.''

Japan's central bankers would love to nudge interest rates higher to prove that efforts to combat deflation have succeeded. With Japanese consumer prices dropping an annual 0.3 percent in January and 0.2 percent in December, based on core prices excluding fresh food, their patience will be sorely tested in coming months.

The Pause That Refreshes

King, who's been Bank of England governor since July 2003, has been able to sit on his hands since August. Five increases starting in November 2003 drove the benchmark U.K. interest rate to 4.75 percent, the highest among Group of Seven nations.

The interest-rate futures market is anticipating further increases. The rate on the December U.K. contract has soared to about 5.2 percent from 4.75 percent at the start of the year. The central bank raised its forecasts for both growth and consumer prices in its Feb. 16 quarterly inflation report, and said inflation might bust its two-year 2 percent target.

The minutes of the bank's Feb. 10 decision show that one of the nine policy makers, Paul Tucker, voted to raise rates -- the first nonconformist since April 2004. ``We need to be pre- emptive, to head off trouble at the pass, even at the risk of sometimes taking the wrong decision,'' said Deputy Governor Rachel Lomax on Feb. 24.

``Note that the last time anyone dissented from the majority, the bank raised rates by 25 basis points at the next two meetings,'' says Paul Robinson, a senior interest-rate products salesman at Man Group Plc in London.

Catchphrase Policy

Even the Fed's Greenspan, the most proactive of the four central bankers, has had an easy time setting policy; feed the world of finance an easy-to-remember catchphrase by repeating the word ``measured'' every time you can, raise rates by a quarter- point every six weeks or so, and the job is done.

That recipe has taken the Fed funds target rate for overnight loans to 2.5 percent in six consecutive steps since June -- a move ignored by the bond market, where 10-year yields of about 4.4 percent help ensure that mortgage rates for U.S. consumers and borrowing costs for companies remain low.

Led Into Temptation

With oil at more than $50 a barrel, commodity prices up almost 10 percent this year as measured by an index compiled by Dow Jones & Co. and American International Group Inc., and the U.S. economy posting a revised annual growth rate of 3.8 percent in the fourth quarter, there must be a strong temptation for Greenspan to show the market he means business by doubling the next rate increase.

The perfect excuse may arrive tomorrow, in the guise of the February jobs report. The U.S. economy probably added 225,000 jobs last month, according to the median estimate of 66 economists surveyed by Bloomberg. An unexpected jump -- a repeat, say, of March 2004's 320,000 figure -- could trigger a half-point increase at the Fed's March 22 meeting.

The guardians of global monetary policy have succeeded in making it `boring,'' the long-held wish of King at the Bank of England. Times are about to get a lot more interesting.

To contact the writer of this column: Mark Gilbert in London at magilbert@bloomberg.net.

Last Updated: March 3, 2005 00:29 EST