{"id":9550,"date":"2023-11-10T06:17:42","date_gmt":"2023-11-10T06:17:42","guid":{"rendered":"https:\/\/lendingsensibly.com\/economy\/feds-barkin-swings-in-long-term-treasury-yields-not-a-useful-variable-for-deciding-interest-rate-policy\/"},"modified":"2023-11-10T06:17:42","modified_gmt":"2023-11-10T06:17:42","slug":"feds-barkin-swings-in-long-term-treasury-yields-not-a-useful-variable-for-deciding-interest-rate-policy","status":"publish","type":"post","link":"https:\/\/lendingsensibly.com\/?p=9550","title":{"rendered":"Fed\u2019s Barkin: Swings in long-term Treasury yields not a useful variable for deciding interest-rate policy"},"content":{"rendered":"
\n

The movement in long-term bond yields may be capturing headlines, but it isn\u2019t a great guide for deciding what to do with interest rates, Richmond Fed President Tom Barkin said Thursday.<\/p>\n

\u201cI don\u2019t think long rates are quite useful as a policy variable,\u201d Barkin said during a conversation webcast by MNI. \u201cThey can move, you know, pretty significantly over a relatively short time period.\u201d<\/p>\n

\n

The yield on the 10-year Treasury
\n BX:TMUBMUSD10Y
\n topped 5% before sliding after the Fed meeting in early November.<\/p>\n

Barkin added he doesn\u2019t ignore bond rates, but tries to take a more \u201cholistic\u201d view of financial conditions.<\/p>\n

\u201cHave they loosened since the last meeting? Sure,\u201d Barkin said. \u201cWhere will they be at the next meeting, I have no idea.\u201d<\/p>\n

In his talk, Barkin said he expects the economy will experience \u201csome sort of slowdown\u201d in coming months.<\/p>\n

He cited lagged negative effects of past rate hikes as a concern. The Fed has raised its benchmark rate by 525 basis points over the past year and a half.<\/p>\n

\u201cI just have to believe the net impact of all this tightening will eventually hit the economy harder than it has,\u201d he said. \u201cI think there is more lags to come.\u201d<\/p>\n

Economists at Goldman Sachs argued in a research note Wednesday that they believe most of the negative effects from past rate hikes are behind the economy.<\/p>\n

Barkin said inflation \u201cis headed in the right direction,\u201d but cautioned that further progress \u201cwill be bumpy.\u201d<\/p>\n

Given the supply-chain problems during the pandemic, he said, \u201ca whole bunch of people\u201d got the opportunity to raise prices. <\/p>\n

\u201cWhat they found out is they liked it,\u201d he said. \u201cIt\u2019s the quickest way to get to the bottom line.\u201d<\/p>\n

While the \u201cspiky supply-chain-oriented price increases\u201d are a thing of the past, he said, companies in some sectors that think they can raise prices \u201care going to try,\u201d he said.<\/p>\n

This won\u2019t stop until competitors or customers put enough pressure on the companies, Barkin added. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The movement in long-term bond yields may be capturing headlines, but it isn\u2019t a great guide for deciding what to do with interest rates, Richmond Fed President Tom Barkin said Thursday. \u201cI don\u2019t think long rates are quite useful as a policy variable,\u201d Barkin said during a conversation webcast by MNI. \u201cThey can move, you know, pretty significantly over a relatively short time period.\u201d The yield on the 10-year Treasury BX:TMUBMUSD10Y topped 5% before sliding after the Fed meeting in early November. Barkin added he doesn\u2019t ignore bond rates, but tries to take a more \u201cholistic\u201d view of financial conditions.<\/p>\n","protected":false},"author":1,"featured_media":1811,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[],"class_list":["post-9550","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"yoast_head":"\nFed\u2019s Barkin: Swings in long-term Treasury yields not a useful variable for deciding interest-rate policy | LendingSensibly<\/title>\n<meta name=\"description\" content=\"The movement in long-term bond yields may be capturing headlines, but it isn\u2019t a great guide for deciding what to do with interest rates, Richmond Fed\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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