ECB's Lagarde: Inflation Risks Elevated, Cautious on June Rate Move

ECB President Christine Lagarde cautioned that inflation risks remain elevated, noting that future shocks are more likely to push inflation away from the central bank's target. She cited war-related disruptions as having generated significant inflationary pressures.

Lagarde also expressed skepticism about the durability of the U.S.-Iran peace deal, describing it as 'far from assured.' Despite these concerns, she stated that Europe has become more resilient to economic and geopolitical shocks.

On monetary policy, Lagarde rejected the characterization of the ECB's June rate decision as an 'insurance hike,' indicating that the central bank remains cautious about the inflation outlook despite recent progress. The comments suggest the ECB is not yet confident that inflation is sustainably returning to target.