Minneapolis Fed President Neel Kashkari said rising Treasury yields don't concern him and are unlikely to drive monetary policy, even as the 10-year yield settled near 4.73% last week. He kept his inflation concerns alive but stopped short of backing a rate hike at the Fed's September meeting.
Federal Reserve Bank of Minneapolis President Neel Kashkari said Sunday that rising U.S. Treasury yields do not pose a concern and are unlikely to influence monetary policy decisions. He told CBS's Face the Nation that the Treasury market is functioning properly, with adequate liquidity and trades taking place as expected.
That assessment, he said, lets the Fed focus on the federal funds rate as its main tool for bringing inflation down.
Yields near multi-decade highs
Treasury yields rose last week, with the 10-year benchmark ending near 4.73%. The 30-year yield remained close to its highest level since 2007. Kashkari noted that while current yields are high compared with recent history, they were significantly higher during the 1990s.
No commitment on a September hike
Fed policymakers will meet next in September. At their July meeting, they kept interest rates unchanged for the fifth consecutive time. Kashkari was one of three officials who dissented in favor of a quarter percentage point rate increase because of concerns about persistent inflation.
On Sunday, he maintained those inflation concerns but did not commit to supporting a rate hike at the September meeting. According to Investing.com: "I don't want to prejudge the next meeting." He added that he is not confident inflation is heading back to target in a short period of time.
Source: Investing.com
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