Fed’s Logan Says Higher Long-Term Yields May Reduce Need for Tightening

Federal Reserve official Logan said the rise in longer-term Treasury yields may partly reflect market expectations for higher policy rates. At the same time, she noted that higher term premiums could be doing some of the work of tighter financial conditions.

If the increase in long-term yields is driven by term premiums rather than rate expectations alone, that may reduce the need for further Fed tightening, Logan said. She added that she will continue to monitor bond yields and assess their implications for monetary policy.