Lagarde Warns Surging Bond Yields Will Slow 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 bond markets, driven by expectations of higher inflation and further interest rate increases.

Bond yields rise as prices fall. The surge can push up financing costs for governments and businesses, adding pressure on economic activity across the currency bloc.

Lagarde’s warning highlights the growth risks posed by tighter financial conditions as investors anticipate continued monetary tightening.