Kashkari: Treasury market moves show Fed's new framework is working

FILE PHOTO: Minneapolis Federal Reserve Bank President Neel Kashkari poses during an interview with Reuters in his office at the bank’s headquarters in Minneapolis, Minnesota, U.S., January 10, 2020. REUTERS/ Ann Saphir

(Reuters) – Minneapolis Federal Reserve Bank President Neel Kashkari said he is not concerned about the recent rise in the 10-year U.S. Treasury yield, noting that the real yield, after accounting for inflation has been flat since last summer.

An uptick in real yields could warrant a policy response from the Fed, Kashkari told the Washington Post in an online event, but that’s not what he’s seeing. Instead, he said, he views the Treasury market move as evidence the Fed’s new framework, under which it has vowed to keep rates at their current near-zero level until the economy reaches full employment and inflation hits 2% and looks headed above it, is working.

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