Lagarde: We oppose any European response to Trump’s tariff threats.. Retaliation is a bad approach

European Central Bank President Christine Lagarde said in an interview published by the Financial Times on Monday that the euro zone is “very close” to reaching the bank’s medium-term inflation target.

Lagarde said she opposed any European response to US President-elect Donald Trump’s threats to impose tariffs.

She added: “I said that retaliation is a bad approach, because I think that imposing comprehensive trade restrictions followed by reactions and then counter-responses, and a confrontational approach to trade is very bad for the global economy as a whole.”

Earlier in December, Lagarde said the central bank would cut interest rates further if inflation continued to improve towards the 2 percent target.

“We are very close to the point where we can declare that we have succeeded in bringing inflation to our medium-term target (2 percent) in a sustainable manner,” Lagarde told the Financial Times, urging continued vigilance over inflation in the services sector.

“As you know, our latest inflation reading is 2.2%, but the services sector is still at 3.9%, not moving much, it’s been hovering around 4%,” she added.