Christine Lagarde says inflation in eurozone close to ECB’s 2% target

The European Central Bank (ECB) is getting closer to its 2% inflation target. President Christine Lagarde confirmed this but warned that uncertainty from US tariffs could still pose risks.

She stressed that maintaining financial stability is crucial for achieving price stability across the eurozone. Lagarde’s remarks followed the central bank's decision to cut its deposit rate by 25 basis points to 2%. ECB officials stated the institution now stands ready to respond to upcoming economic headwinds. While most expect the regulator to hold rates steady in July, market participants are anticipating at least one more rate cut before year-end.

Lagarde also noted that US trade policy, particularly measures initiated by Donald Trump, is fueling economic uncertainty. She cautioned that unless the current situation is resolved, businesses may be forced to overhaul their supply chains. This could trigger market instability, slow economic growth, and create inflationary risks across the eurozone.