Lagarde signals no preset path for June policy, stressing wage-price spirals and energy shocks as key risks to inflation.
The European Central Bank will maintain a data-dependent approach to monetary policy, with no firm guidance for its June 11 meeting. President Christine Lagarde emphasized the need to monitor inflation risks, including second-round effects like wage-price spirals, despite well-anchored long-term expectations.
Recent energy price shocks have simultaneously fueled inflation and weighed on economic growth. Lagarde cautioned that even a resolution to Middle East tensions would not immediately ease price pressures, citing lag effects and permanently higher price levels. The ECB will track oil reserves and demand sustainability to assess energy-related inflation risks.
Lagarde urged governments to keep fiscal measures temporary and targeted, warning that broader stimulus could force the ECB into a tighter policy stance. The bank’s focus remains on ensuring inflation returns to its 2% medium-term target.