Lagarde Warns Surging Bond Yields Will Weigh on Eurozone Growth

European Central Bank President Christine Lagarde warned on Monday that a sharp rise in bond yields would slow economic growth in the eurozone.

Her remarks followed a heavy sell-off in bonds, driven by expectations of higher inflation and continued interest rate increases.

Bond yields rise as prices fall. The surge can push up financing costs for governments and businesses, adding pressure to economic activity.

Lagarde’s warning highlights the strain facing the eurozone as inflation expectations and the prospect of further rate rises unsettle bond markets.