ECB Nears Inflation Target Amid Global Trade Tensions

European Central Bank President Christine Lagarde indicated the euro zone is approaching its medium-term inflation target of 2.2%. Despite improvements, services inflation remains high. Lagarde cautioned against retaliation in trade disputes, while ECB official Gabriel Makhlouf advised gradual interest rate cuts amidst uncertain economic forecasts.

Christine Lagarde, President of the European Central Bank (ECB), stated that the euro zone is on the brink of meeting the ECB's medium-term inflation target. In an interview with the Financial Times, she emphasized the need for vigilance on services inflation despite overall progress.

Lagarde reiterated her stance against economic retaliation in global trade, particularly amidst threats from incoming U.S. President Donald Trump. She believes that such conflicts could harm the global economy, advocating for a more diplomatic approach.

Meanwhile, Gabriel Makhlouf, from the ECB's governing council, echoed concerns about services inflation and suggested that interest rate cuts should be gradual unless economic conditions shift dramatically.

(With inputs from agencies.)