By Marta Vilar – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde said on Thursday that risks to the outlook remained broadly balanced and there was nothing materially altering the ECB’s baseline scenario.

Speaking at the press conference following the ECB Governing Council meeting, Lagarde said the decision to leave interest rates unchanged was unanimous. She described risks to the outlook as broadly balanced, noting that while some risks had increased, others had declined.

The ECB did not target the exchange rate, she said, even as she acknowledged its importance for the growth and inflation outlook.

She said the exchange rate had been discussed at the meeting and that the euro’s appreciation was observed, but that the move had been under way since March last year and its effects were already reflected in the ECB’s baseline.

Asked about the discussion about the balance of risks, Lagarde said that the Governing Council was “not seeing a reduction of the range of risks.” Instead, some risks were rising; others, easing.

“[W]e are in a good place and inflation is in a good place,” she said, adding that this assessment might require explanation given January’s inflation reading of 1.7%.

“I would just remind you that our good place is a factor of whether we are convinced that we will reach our medium-term target of 2%,” she said. “And we cannot be hostage to one data point - I've said that many times – we cannot be hostage to one reading of inflation which is set to vary over the next months.”

She said there were multiple factors behind the latest inflation figure, pointing in particular to the decline in energy prices, which she described as a base effect.

The ECB had long projected a temporary undershooting of inflation in early 2026, she said, and reiterated that inflation is expected to return to 2% in 2027 and 2028.

Lagarde said she was “particularly attentive” to services, which had been “declining a little bit,” but also to wages, and said that the wage tracker had led the ECB to expect more wage growth moderation.

She pointed to more information and data in the March meeting but said that “there is nothing, I think, that is really changing the baseline at all.”

Asked about Kevin Warsh’s nomination as Fed chair, she said she had known him for a long time and that she welcomed his appointment.

Monetary policy was “in good shape”, “agile” and “prepared to do what is necessary,” she said.