Economy

Esther George says the Fed’s ‘large balance sheet’ may have helped cause the yield curve inversion

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Kansas City Fed President Esther George said the Federal Reserve may be partly responsible for the yield curve inversion.

“I think the Fed still has a large balance sheet, and that could be putting some downward pressure on those longer-term rates,” George told CNBC’s Steve Liesman from the Kansas City Fed’s economic policy symposium in Jackson Hole, Wyoming.

The yield on the benchmark 10-year Treasury note has fallen below the 2-year yield twice since Aug. 14, causing the bond market’s main yield curve to invert. The bond market phenomenon is historically a trusty signal of an eventual recession; however, George said the Fed could be influencing the long-end of that equation.

The Fed…



Source cnbc.com

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