Christine Lagarde (pictured) said it was 'impossible' to guarantee that policymakers would meet a 2% inflation target in the short term.

The euro zone economy is facing exceptional shocks from trade, defence and climate issues, possibly amplifying inflation volatility and raising the risk that price growth becomes more persistent, ECB President Christine Lagarde said on Wednesday.

Inflation fears have surpassed US borders. Christine Lagarde, president of the European Central Bank (ECB), warned that abrupt changes in global trade and the defense system of the region will make it more difficult to maintain inflation stability.

A rise in European defense spending in response to doubts about the reliability of the U.S. as an ally could push inflation higher, but tariffs might have the opposite effect, the ECB President said.

European Central Bank President Christine Lagarde said abrupt shifts in global trade and the region’s defense architecture will make it harder to keep inflation stable.