Lagarde stated that the European Central Bank's rate hike in June is not a "precautionary rate hike."

European Central Bank President Lagarde said on Monday that the decision to raise key interest rates this month was based on their forecasts, rather than being a preemptive action taken to manage the risk of runaway inflation. Lagarde, speaking at the opening of the European Central Bank Central Banking Forum in Sintra, Portugal, stated, "Some have labeled our rate hike earlier this month as 'precautionary.' This characterization is not accurate." She added, "This was a decision made based on what we see in front of us. In an environment filled with great uncertainty, our confidence in making this decision comes from years of investment in data, indicators, and forecasting." Lagarde also mentioned that the ECB's resilience to shocks has increased, with tools such as transmission protection tools allowing them to prevent unexpected spikes in borrowing costs for individual countries in the Eurozone. She noted that this resilience also means that the ECB can raise rates to combat inflation without worrying that tightening itself will become a source of financial stress. Lagarde concluded by saying, "While we are more likely to face shocks that push inflation away from target, the resilience that Europe has built means that these shocks will have a more limited impact on our economy. Therefore, we may find ourselves more often in a middle ground, between shocks we can ignore and shocks we must vigorously address."