ECB Nears Inflation Target, Lagarde Warns on Services

Christine Lagarde, President of the European Central Bank (ECB), announced that the euro zone is nearing its medium-term inflation target of 2%, with the current rate at 2.2%. Despite this progress, she emphasized the need for vigilance regarding services inflation, which remains high at around 4%. Lagarde reiterated her opposition to retaliatory trade actions, particularly in light of threats from incoming U.S. President Donald Trump, arguing that such conflicts could be detrimental to the global economy. Additionally, ECB governing council member Gabriel Makhlouf supported Lagarde's concerns about services inflation and advocated for gradual interest rate cuts rather than abrupt changes. Overall, the ECB is positioning for potential rate cuts if inflation continues to ease, while remaining cautious about wage growth and trade tensions. The comments reflect a broader strategy to maintain economic stability amid ongoing global uncertainties.