ECB President Lagarde: The Impact of Rate Increase on Inflation is Limited.

ECB President Lagarde Evaluates the Effects on Inflation

In an interview with RTL Radio, European Central Bank (ECB) President Christine Lagarde stated that the impact of short-term tariff increases on inflation would be quite limited. Lagarde said, "If we look at the short term, the initial effect will be relatively small."

Possible Effects of Tariff Increase on Inflation

Lagarde mentioned that U.S. President Donald Trump's recent threats could raise the average tariff rate in the Eurozone from 12% to 15%. However, the ECB President noted, "Our inflation will be very slightly affected, likely to move upward, but since we have kept it under control at 1.9%, the impact will be minimal."

Impact on Germany and Exporting Countries

Lagarde highlighted that major exporting countries, including Germany, would be more affected by potential tariff increases and warned of a confidence shock. "President Trump's constant backtracking creates much more serious uncertainty," she said.

Monetary Policy and Growth Expectations

The ECB President emphasized that monetary policy is currently in a good state. Lagarde stated that better results could be achieved in growth, productivity, and debt, urging France to remain committed to reducing its debt.