The European Central Bank (ECB) has increased its key interest rates to help contain inflation in the euro area, which currently stands at 3.3%, above the bank's 2% target over the medium term. According to ECB President Christine Lagarde, the decision was made in response to a major shock that will likely last longer than expected, resulting from the conflict in the Middle East and the destruction of refining capacity worldwide, particularly in Russia. This shock has led to increased energy costs, driving all prices higher. Lagarde emphasized that the ECB must react to maintain price stability, even if the shock is external and the domestic economy is not overheating. She acknowledged that raising interest rates can be risky for growth but noted that the current shock is longer-lasting, and the ECB must consider the entire euro area, not individual countries. Lagarde also discussed the need for structural reforms in France, including simplifying administrative regulations, making the labor market more flexible, and implementing pension reform. She expressed confidence that growth can be revived in the euro area through improved productivity, despite demographic challenges. However, she warned of potential risks, including a hypothetical AI-related stock market correction in the United States, which could impact Europe. The ECB staff has warned of this possibility, and Lagarde emphasized that European banks hold AI-related assets, but the financial sector is stronger than it used to be. In terms of the presidential campaign in France, Lagarde stated that her position is to share her perspective as a European and make the case for Europe, without taking a stance as a candidate. She confirmed that she will leave the ECB in 2027 and has no plans to return to national politics. The increase in interest rates is expected to have an impact on the economy, particularly for those planning to purchase property or invest. However, Lagarde emphasized that the ECB's primary goal is to maintain price stability, and the decision was made with the entire euro area in mind.