Inflation to stabilize to 2% target in the medium term

Finance

Inflation to stabilize to 2% target in the medium term

European Central Bank (ECB) President Christine Lagarde said in her introductory statement before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament during European trading hours on Thursday that the Eurozone inflation is expected to stabilize at the central banks 2% target in the medium term.

Remarks

We can now see that our efforts to bring inflation down have been effective.

We expect food inflation to continue to decline and stabilise somewhat above 2% as of late 2026.

Activity is expected to be supported by rising labour income amid a resilient labour market, as well as investment in defence, infrastructure and digital technologies.

Monitor FX, not target it.

Not seeing labour market redundancies from AI.

Really convinced that we should maintain data dependent approach.

We are in a good place, but agile.

Market reaction

The Euro (EUR) appears to have reacted slightly negatively to ECB Lagardes comments. As of writing, EUR/USD trades marginally lower to near 1.1800.