Two Fed officials tentatively embrace bond yield jump
By Michael S. Derby
NEW YORK (Reuters) — Two Federal Reserve officials on Thursday tentatively welcomed a jump in bond market yields as something that could complement the U.S. central bank's work to slow the economy and get inflation back to the 2% target, while also noting they see a good chance that no more interest rate increases will be needed.
The policymakers — Philadelphia Fed President Patrick Harker and Boston Fed President Susan Collins — spoke in separate interviews that took place as central bankers and other economic leaders gathered for an annual symposium in Jackson Hole, Wyoming. As they laid out their outlooks for monetary policy and the economy, Harker and Collins also took stock of what a jump in bond yields means for the central bank's mission to slow economic activity to lower inflation.
The rise in long-term borrowing costs «helps cool the economy some,» Harker said in an interview on CNBC. He said the jump was not a major concern but was something he was monitoring.
Meanwhile, Collins said on Yahoo Finance's video channel that the rise in yields «absolutely fits in» with the broader story around the economy and monetary policy. «I think it's helpful that the higher longer rates are consistent with an understanding that this is going to take some time» on the part of the Fed to get inflation back down to the 2% target.
Harker and Collins spoke before the formal start of the Kansas City Fed's Jackson Hole conference, which will feature a hotly anticipated speech on the economic outlook by Fed Chair Jerome Powell at 10:05 EDT (1405 GMT) on Friday.
The Fed, which has pushed short-term rates aggressively higher since March 2022 to curb the worst inflation surge in decades, lifted its benchmark
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