Significant Uncertainty Surrounds Factors Influencing Yield Curve, Reports Reuters

Minneapolis Federal Reserve Bank President Neel Kashkari stated on Friday that there is significant uncertainty surrounding the factors influencing long-term bond yields. The increase in these yields during September and October contributed to the U.S. central bank’s decision to maintain short-term interest rates during its recent meeting.

“At present, there is considerable attention on the Treasury yield curve and the reasons behind its fluctuations,” Kashkari remarked during an appearance at the Economic Club of Minnesota.

He cautioned, “If anyone claims to know definitively what is causing these shifts, be skeptical, as no one can say for certain. It’s best not to rely on a single explanation, as we may end up being incorrect.”

His comments came shortly after a Labor Department report indicated that U.S. employers have reduced hiring and slowed wage increases, both of which suggest a cooling labor market. In reaction to this news, bond yields experienced a notable drop.

Kashkari did not specifically comment on the jobs data released that day or the subsequent market reaction.