The Federal Reserve chairman explained why longer-term bond yields are rising, including market views of a resilient economy and concerns about fiscal deficits.
| Everyone in financial markets seems to have a different explanation for why US bond yields have reached theirSpeaking to the Economic Club of New York, Jerome Powell started with what wascausing higher yields that translate to rising borrowing costs for business, government and households.
“It’s not a secret...we know that we’re on an unsustainable path fiscally. It’s not that the level of the debt is unsustainable, it’s not, it’s that the path we’re on is unsustainable, and we’ll have to get off that path sooner rather than later.” Powell said these changes were all pointing to higher borrowing costs. “If you look at financial conditions indexes, they’re showing tightening and a lot of that is because of longer rates,” he said.
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