Lagarde Warns Inflation to Remain Above Target for Extended Period

European Central Bank (ECB) President Christine Lagarde warned that inflation will remain well above target for an extended period due to ongoing conflicts in the Middle East and Ukraine. The ECB raised its three key interest rates by 25 basis points, but the bank's Governing Council did not discuss possible future moves.

Lagarde noted that short-term inflation expectations remained elevated, but the ECB continues to foresee stabilization in the medium term. The bank remains committed to setting monetary policy to ensure inflation stabilizes at its 2% target.

The ECB had anticipated stronger pressure from food prices, while headline inflation is now expected to remain elevated for longer than initially projected. Lagarde acknowledged that recent economic figures and the resilience of the eurozone economy have surprised the Governing Council.