Lagarde Says Investors Can Test ECB Resolve as Much as They Want

European Central Bank President Christine Lagarde said her institution won’t shy away from using all its tools if investors try to push bond yields higher.

“They can test us as much as they want,” she said in a Bloomberg TV interview with Francine Lacqua on Wednesday. “We have exceptional tools to use at the moment. We will use them as needed.”

The ECB stepped up the pace of its monetary support this month to curb rising bond yields that threaten to undermine the euro zone’s economic recovery from the pandemic.

Yields have climbed as part of a global reflation trade fueled by the U.S. economic rebound and that nation’s $1.9 trillion fiscal stimulus package.

In contrast, the euro zone has been slow on vaccinations and has extended business and social restrictions to combat a third wave of infections. The bloc’s 750 billion-euro ($880 billion) joint fiscal package won’t start being deployed until June.