U.S. Treasury yields remain elevated but do not warrant Federal Reserve policy adjustments, according to Neel Kashkari, president of the Federal Reserve Bank of Minneapolis. Speaking on CBS’s Face the Nation on Sunday, Kashkari stated that the 10-year Treasury benchmark yield, which ended last week near 4.73%, and the 30-year yield, near its highest since 2007, reflect a functioning market with sufficient liquidity and expected trading activity.
Kashkari’s remarks come as Treasury yields sit at levels significantly higher than recent years, though still below peaks observed in the 1990s. While he acknowledged that inflation remains a concern and has not yet shown clear signs of sustainably easing toward the Fed’s 2% target, he refrained from signaling a preference for a rate hike at the upcoming September Federal Open Market Committee meeting.
At the July policy meeting, Kashkari was one of three Fed officials who dissented, advocating for a 25-basis-point increase in the federal funds rate due to worries about persistent inflation pressures. His comments on Sunday did not include a commitment to support such a move in September, with Kashkari noting that more economic data is required before forming a definitive view.
"We need to see more data, but I don’t want to prejudge the next meeting," Kashkari said. "But I’m not feeling confident right now that inflation is heading back down to target in a short period of time."
