Inflation is “more uncertain than usual due to trade tensions,’’ Lagarde said at a press conference following the ECB meeting. Related: Former Fed Chair sends stern message

Keeping European Central Bank interest rates unchanged this week was appropriate after inflation reached its 2% target and uncertainty around US tariffs remained high, according to Governing Council member Joachim Nagel.

The ECB's June estimate showed that higher U.S. tariffs would result in lower growth and - depending on any EU retaliation - lower medium-term inflation in the euro zone. Even the ECB's baseline projection from June, which incorporates 10% tariffs from the United States, saw price growth below 2% over the next 18 months.