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“But it must also contend with a surge in government bond yields — especially in debt-laden France — that has pushed up borrowing costs for households and businesses and which Lagarde has said will curb growth and inflation.”

“Federal Reserve hiked interest rates for the first time in three years on Wednesday, and several economists say this could add pressure on the Bank of Canada to raise borrowing costs for Canadians sooner than later.”

“Warsh, economists say, has largely boxed himself into a rate hike after delivering a high-profile speech last month warning that inflation remains too far above the Fed’s two per cent target and might require higher borrowing costs to bring it down.”

“Bonds are essentially loans, where governments or companies look to borrow money from the general public, and those bond purchasers expect a return or interest on that borrowed money, which is known as the yield on those bonds.”