PARIS (Reuters), – As the conflict in Ukraine is having a vastly different impact on the economies of both countries, the world’s top two central banks are likely to move in opposite directions, Christine Lagarde, President of the European Central Bank, said Monday.

Just days after the ECB declared it wasn’t in any hurry to hike its record low deposit rate and despite continuing unwinding exceptional stimulus, the U.S. Federal Reserve raised interest prices last week.

Lagarde said that the two economies were in different places in the cycle of the economy, even prior to the conflict in Ukraine. “For geographic reasons, Europe’s war exposure is greater than that of the U.S.

Inflation in eurozone has already risen to a record high of 5.9%, and it could rise to 7% in future months. This is far above the ECB’s 2% goal.

The inflation rise will also affect households’ purchasing power. In fact, the ECB cut its growth projections. Some policymakers believe that an even worse outcome may be possible.

Lagarde stated that the U.S. is less dependent than Europe on commodities imports, and trade will be less affected. Therefore, the central banks of the U.S. will have to work in sync.

“Our monetary policy won’t run on exactly the same beat,” she stated.

Europe will be required to increase its greening efforts as a direct result of this war. This is to lessen its dependency on Russia’s energy, which it has been the largest source of.

Lagarde said that the transition would be inflationary for the near- and medium-term. However, the longer-term effect of the transition is to increase prices.

Inflationary forces will prevail in the short and medium-term. She said that in the longer term forces on prices would be more deflationary.