ECB's Lagarde Says Inflation Outlook Still Uncertain

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00:00The outlook for inflation continues to be more uncertain than usual on account of the still

00:06volatile international environment. Inflation could turn out to be lower if the rise in U.S.

00:14tariffs reduces demand for euro-area exports and if countries with overcapacity increase their

00:22exports to the euro-area. Moreover, a stronger euro could bring inflation down further than expected.

00:33An increase in volatility and risk aversion in financial markets could weigh on demand

00:40and thereby also lower inflation. By contrast, inflation could turn out to be higher if more

00:48fragmented global supply chains pushed up import prices, curtailed the supply of critical raw

00:57materials and added to capacity constraints in the euro-area economy. A slower reduction in wage

01:06pressures could delay the decline in services inflation. A boost in defence and infrastructure

01:14spending could also raise inflation over the medium term. And extreme weather and extreme weather

01:22events, and the unfolding climate and nature crisis more broadly, could drive up food prices by more

01:29than expected.