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ECB President Christine Lagarde said the current environment is complicated by an energy shock and artificial intelligence exerting opposing forces on the economy, calling it very difficult to separate supply-driven from demand-driven shocks. She stressed that policymakers must still deploy their tools to keep inflation from running away. The remarks highlight the challenge facing the ECB as it weighs energy-related price pressures against demand shifts tied to AI investment. Traders will watch incoming euro-area inflation and energy data for signals on how the central bank balances these competing forces.

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European Central Bank, Christine Lagarde