The president of the European Central Bank, Christine Lagarde, has not ruled out the possibility of a further interest rate hike, stressing that high energy costs remain the primary driver of inflationary pressures. She also suggested that the outcome of the U.S. midterm elections could influence Donald Trump’s tariff policy, while noting that no immediate changes appear to be on the horizon.
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New economic data will shape ECB decisions
According to Reuters, Lagarde emphasized that incoming economic data will help the ECB determine whether a further interest rate increase is warranted. She noted that by December, a substantial number of new economic indicators will be available for assessment. The ECB chief underlined that it remains essential to deploy all available monetary policy tools to prevent inflation from spiraling out of control.
Secondary effects of energy prices take center stage
Lagarde placed particular emphasis on the secondary effects of rising energy prices, stressing the need for close monitoring. She described the current economic environment as exceptionally complex, with the energy shock and the rise of artificial intelligence pulling the economy in opposite directions, while demand-side disruptions are also being recorded. In this context, she explained, it is difficult to disentangle supply-side effects from those driven by demand — a reality that significantly complicates the assessment of inflationary pressures.
No immediate prospect of change to U.S. tariffs
Turning to political developments in the United States, Lagarde suggested that the outcome of the midterm elections could potentially influence the country’s tariff policy. However, she clarified that any such changes are not expected to materialize immediately, making clear that she does not foresee an imminent revision of the tariffs imposed by the Trump administration.
