Lagarde warns bond surge may affect Eurozone growth
The article discusses the warning issued by European Central Bank President Christine Lagarde that a sharp rise in bond yields will lead to a slowdown in economic growth within the Eurozone. She explained that the wave of bond sell-offs, driven by expectations of rising inflation and continued interest rate hikes, has resulted in increased borrowing costs for companies and households, thereby weakening economic activity and slowing growth rates. However, Lagarde indicated that the rise in yields could indirectly help reduce inflationary pressures, as there are so far no signs of inflation transferring from energy prices to other sectors. She also assured that the current monetary policy remains medium-term, with the bank continuing to raise interest rates to combat inflation, which reached 3.2% in August. Additionally, German bond yields have exceeded 3.6%, the highest level since 2009, reflecting a global assessment of interest rates.
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