Lagarde Warns Bond Yields May Slow Eurozone Growth
The President of the European Central Bank, Christine Lagarde, confirmed that rising long-term bond yields in the Eurozone will lead to a slowdown in economic growth and reduce the impact of rising energy costs on inflation. Despite growth remaining resilient so far, increasing interest rates will slow down the pace of growth, emphasizing the need for a carefully considered monetary policy to control prices. She noted that the current interest rate is at the upper end of the neutral range (2-2.5%) and that interest rates are not moving in parallel with energy prices, with close monitoring of secondary inflation effects to make appropriate decisions. Lagarde reiterated her call for European countries to phase out financial aid and direct it toward the most vulnerable groups, stressing that unfocused support could hinder efforts to combat inflation.
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