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Lagarde Warns ECB Weighing Rate Hikes as Europe Faces Energy, Stablecoin Risks

European Central Bank President Christine Lagarde signaled the ECB could raise interest rates in June. Policymakers are grappling with competing pressures from energy costs and financial stability concerns. The ECB chief cautioned that euro-denominated stablecoins pose material risks to banking systems and monetary-policy transmission, casting doubt on their introduction. Lagarde said the central bank is carefully calibrating its response to inflationary pressures stemming from geopolitical tensions, ensuring policymakers avoid acting either prematurely or too late. She also called on EU leaders to demonstrate resolve in reducing Europe's dependence on energy imports, citing soaring costs driven by regional conflicts. The remarks underscore mounting challenges facing European monetary authorities as they balance inflation control against economic resilience.