Minneapolis Federal Reserve Bank President Neel Kashkari on Friday said there is a lot of uncertainty over what is driving longer-term bond yields, whose rise in September and October helped convince the U.S. central bank it could leave short-term interest rates on hold at its meeting this week.
“Right now, there’s a lot of focus on the Treasury yield curve and what’s driving some of the moves in the yield curve,” Kashkari said at the Economic Club of Minnesota.
“If anybody tells you definitively that they know exactly what’s driving that, be very suspect because none of us knows for sure … so let’s not bet on any one explanation because we might get that wrong.”
He spoke hours after a Labor Department report showed U.S. employers have slowed hiring and tempered wage increases, both signs the labor market is cooling. Bond yields fell sharply in response.
Kashkari did not specifically address Friday’s jobs data or market reaction.
