ECB's Lagarde says rising yields will slow growth and weaken inflation transmission.

European Central Bank President Christine Lagarde said rising bond yields will dampen economic growth and limit the pass-through of higher energy costs into inflation. "While growth has held up, long-term interest rates have risen significantly since our last meeting, which will weigh on growth and make the pass-through to prices lower than we estimated at the time of our September projections," Lagarde said on Monday. She told European lawmakers in Brussels that the lack of second-round effects so far means the ECB should "respond prudently, as appropriate, to contain inflation."