ECB’s Lagarde: “Uncertainty is Back,” Posing a Downside Risk to Growth

20 January 2026

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Tuesday said that threatened US tariffs meant the return of uncertainty that could be itself cause economic growth to sputter.

In an interview with CNN on the margins of the World Economic Forum in Davos, Switzerland, Lagarde called the tariff threats of US President Donald Trump “a movie we’ve seen before.”

“And what is I think more important than the tariffs themselves is the rising uncertainty that we are seeing again,” she said. “So, uncertainty is back.”

This was “very inconvenient” for small and medium-sized enterprises both in the US and Europe, she said. The possibility that growth, which was doing “reasonably well,” would “stall” as a result of the uncertainty was “really inconvenient,” she said.

Lagarde pushed back on the interviewer’s characterization of monetary policy as having become “slightly more predictable,” saying that in fact it had become “very predictable.”

“Two percent inflation, 2% interest rates here in Europe,” she said.

The economic ties between the US and Europe were vast and intricate, she said. “And to jeopardize that, to put it into question, is not conducive to good business policies. And I think corporate American should be thinking about it—as European corporate is thinking about it.”

Trust had been “undermined,” she said. “When you keep repeating the same pattern or undermining the rule of law, undermining the contracts, undermining what has been agreed between parties, then parties begin questioning: is that for real? Is that going to change again?”

“And that’s when uncertainty looms large,” she added.