Lagarde says rising bond yields could slow inflation
European Central Bank (ECB) President Christine Lagarde said the global bond selloff is raising borrowing costs across the euro area and could reduce inflation by slowing economic growth.
Lagarde noted that financial conditions have tightened beyond the assumptions in the ECB's earlier projections.
Higher bond yields could increase corporate investment costs and household financing burdens. However, with rising energy prices continuing to fuel inflation, the ECB faces a delicate balance between supporting economic activity and maintaining price stability.
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