The President of the European Central Bank warns that the energy supply crisis may increase the risk of inflation.

Christine Lagarde, President of the European Central Bank, stated at a conference named "European Central Bank and its observers" held in Frankfurt, Germany on the 25th that the Eurozone's economic outlook faces new uncertainty due to the impact of the U.S. military strikes on Iran's energy supply. Despite the slight increase in inflation risks, the European Central Bank will unconditionally ensure a medium-term inflation target of 2%. Lagarde said that the Eurozone's inflation rate in February was 1.9%, close to the target, but new geopolitical shocks have rapidly changed the situation. Lagarde pointed out that the International Energy Agency stated that recent oil supply disruptions have become one of the "most serious situations in the history of the global oil market," and the impact of liquefied natural gas supply disruptions is also emerging. The rise in energy prices itself is not the main risk, the key is whether it will transmit to a more widespread level. Lagarde also mentioned that the European Central Bank recently released two economic outlook scenarios. In an unfavorable scenario, inflation may rise by nearly 1 percentage point compared to the baseline scenario this year but then fall back; in a severe scenario, inflation will further rise and last longer, with a possible increase of nearly 3 percentage points higher than the baseline scenario by 2027, unable to return to the target level.