Global Inflation Weighs on G-7 as Higher Bond Yields Persist

Global finance chiefs are coming to terms with the new economic reality that a consumer-price shock they had hopes of skirting is looking likely to endure.

As the second day of Group of Seven discussions proceed in Paris, the aftermath of a bond-market readjustment factoring in more inflation has raised the burden of proof needed to keep borrowing costs unchanged. The prospect of higher interest rates is looming, with associated stress to growth and budget deficits.