European Central Bank President: "US Tariffs Increase Uncertainty... Potential Inflation Stimulus"

The European Central Bank (ECB) has projected that the aggressive tariff policies of the United States could increase inflation in the Eurozone (20 countries using the euro) by 0.5 percentage points.

Christine Lagarde, President of the European Central Bank, stated this at the European Parliament's Economic and Monetary Affairs Committee on the 20th. President Lagarde said, "The new US administration is changing direction in various policy areas, including trade," and added, "Uncertainty about future trade policies is rapidly increasing." She further noted, "The Eurozone is deeply integrated with the global supply chain, and thus, it is inevitably affected by changes in US trade policies."

This year's inflation rate in the Eurozone is projected at 2.3%. President Lagarde expects that "after some easing of inflation in the coming months, it will stabilize near the target (2%) from the first quarter of next year," and stated, "Considering the increasing uncertainty, we plan to make monetary policy decisions cautiously while maintaining a data-driven approach." The European Central Bank's inflation forecast for next year is 1.9%.