🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

Kashkari: 'possible' higher bond yields mean Fed can do less

Published 10/10/2023, 03:46 PM
Updated 10/10/2023, 04:06 PM
© Reuters. FILE PHOTO: Neel Kashkari, President and CEO of the Federal Reserve Bank of Minneapolis, speaks during an interview with Reuters in New York City, New York, U.S., May 22, 2023. REUTERS/Mike Segar/File Photo
FED
-

By Ann Saphir

(Reuters) -It's "possible" that the recent rise in yields on longer-term Treasuries means the Federal Reserve need not raise interest rates as much as otherwise, but it's hard to know definitively, Minneapolis Fed President Neel Kashkari said on Tuesday.

"It's certainly possible that higher long-term yields may do some of the work for us in terms of bringing inflation back down," Kashkari said in a town hall hosted by Minot State University. "But if those higher long-term yields are higher because their expectations about what we're going to do has changed, then we might actually need to follow through in their expectations in order to maintain those yields."

Asked about the chances that inflation falls back to the Fed's 2% goal but the unemployment rate does not rise sharply -- the so-called soft landing for the economy -- Kashkari said it's looking "favorable."

© Reuters. FILE PHOTO: Neel Kashkari, President and CEO of the Federal Reserve Bank of Minneapolis, speaks during an interview with Reuters in New York City, New York, U.S., May 22, 2023. REUTERS/Mike Segar/File Photo

The job market and the economy have been more resilient than he would have thought to the Fed's rate hikes so far, he said.

Still, he cautioned, if the economy stays too strong, the Fed may need to raise rates further to slow it, risking a harder landing. "It's too soon to declare victory," Kashkari added.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.