Higher market borrowing costs could impact ECB response to inflation, Moulin says
TLT•French central bank governor Emmanuel Moulin said rising euro zone government borrowing costs could lead the European Central Bank to respond more moderately to inflation because higher yields are already weighing on demand.
1. Yields and inflation
Moulin said higher long-term yields could affect demand and lead the ECB to take a more moderate response to the inflation shock, since the increase in yields was already doing some of the work. He said inflation was mainly caused by more expensive energy.
