The president of the European Central Bank (ECB), Christine Lagarde, said on Thursday, 24, that the “effects of inflation rates cannot yet be calculated, is complicated.” At a press conference the ECB keeping interest rates unchanged, she indicated that the monetary authority will evaluate “reciprocal and sectoral tariffs against the EU, but also on other countries,” and stressed that “EU retaliation is optional, does not seem to be a definitive element.”
About the trade war and its impacts on the Eurozone inflation, Lagarde has also pointed out possible consequences for global supply: “Changes in trade routes can generate problems in offering chains,” and added that “there will probably be bottlenecks as a result of tariffs,” which could increase inflationary pressure in the European Union. “It’s hard to determine how fast global uncertainty will be clarified.”
Lagarde also stressed that the institution is in “good position of monetary policy”, based on several data that point to a disinflation trajectory. She reiterated that “inflation is 2% from medium and long term prospects, and wages are falling.”
According to the president of the ECB, the institution is still focused on price stability and does not intend to react to punctual fluctuations. “We will not get out of the way by a small deviation from inflation. Our focus is on the medium term.” She also commented that “inflation will be below the goal of 2% in 2026, but due to base effects,” and said “inflationary shock is in the past”, although it is still necessary to observe next months.
Growth forecasts, she said, are still positive. “Economic growth is a little better or practically in line with the expected,” he said. At the same time, Lagarde warned that the international scenario brings new uncertainties, especially regarding tariffs. She also stressed that “expectations of inflation remain strongly anchored,” which gives the ECB confidence to maintain her gradual approach.
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