Profound shifts in the world economy could make inflation volatile for years to come, complicating efforts to control prices, but sticking with inflation-targeting regimes is still the best option, European Central Bank President Christine Lagarde said on Friday.

ECB President Christine Lagarde praised the "remarkable" unwinding of inflation with minimal job losses, projecting inflation to hit target by 2025. However, she warned that significant uncertainties remain.

European Central Bank Governing Council member Klaas Knot said he’s comfortable with investor bets on further interest-rate cuts.

A big interest rate cut from the U.S. Federal Reserve on Wednesday raised bets on further policy easing at the European Central Bank in October but this is still not the most likely outcome given different economic realities.

FRANKFURT (Reuters) - The European Central Bank should keep cutting interest rates gradually but it does not need to set a schedule since conditions could change between moves, ECB chief economist Philip Lane said in a speech on Monday.

In the US, major equity indexes finished the week higher, recovering much of the losses from the week before, writes Ian Slattery.

The European Central Bank's rate cutting cycle could accelerate over coming months, governing council member Fabio Panetta said on Thursday.

The central bank lowered interest rates by a quarter point, widening a policy gap with the Federal Reserve, which is expected to start cutting rates next week.

The European Central Bank must think hard about how it deals with risks and uncertainty in an era of more-volatile inflation and less clarity about monetary-policy transmission, President Christine Lagarde said.