ECB’s Lagarde warns inflation risks persist as energy and AI trends diverge

European Central Bank (ECB) President Christine Lagarde crossed the wires on Thursday and said that “the current situation is made hard by the energy shock and AI pulling in opposite directions.”

Lagarde said that it is “Still necessary to apply tools to avoid inflation running away,” and doesn’t expect “US tariffs to be revisited right away.”

Key highlights:

The current situation is made hard by the energy shock and AI pulling in opposite directions.

Very difficult to disentangle supply-driven and demand-driven shocks.

Still necessary to apply tools to avoid inflation running away.

We will have many indicators between now and December.

Don't expect US tariffs to be revisited right away.