Lagarde to stay at ECB at least through year-end

Lagarde's comments follow reports suggesting she planned to step down before her contract expired, potentially ahead of the French presidential election. In an interview with The Wall Street Journal, she stated her baseline expectation is to complete her term, emphasizing her mission to ensure price and financial stability for the euro. She also mentioned the World Economic Forum as a potential consideration after her central bank tenure.

Lagarde privately messaged fellow policymakers to reassure them of her continued focus on leading the institution. The ECB issued a statement confirming that Lagarde had not made a decision regarding the end of her term, without explicitly denying the reports of a potential early exit. She had previously stated her intention to complete her term last year but conspicuously omitted this commitment in recent remarks.

Lagarde warned that the "flaring up of the conflict" in the Middle East could further raise inflation, noting that "The risks to the inflation outlook are to the upside. The energy shock could intensify further and its effects on other prices and wages could be stronger than currently expected."