Neel Kashkari downplays concerns over rising US Treasury yields

Federal Reserve Bank of Minneapolis President Neel Kashkari characterized markets as “orderly” and “functioning” amid a sustained climb in long-term borrowing costs, signaling that the Fed isn’t about to panic over bond market gyrations. The message is clear: the central bank sees the yield move as driven by forces outside its direct lane, and it won’t be rushed into policy changes because of it. What’s actually happening with yields The 10-year Treasury yield has been hovering near 4.7%, while the 30-year yield has climbed above 5%. Those are levels the bond market hasn’t consistently touched since the mid-2000s. Kashkari pointed to several forces pushing yields higher. Government borrowing demands, a polite way of saying the federal deficit keeps expanding, are one driver. Another is the surge in capital expenditure tied to artificial intelligence and data center construction. He notably declined to rank these factors, treating them as overlapping contributors rather than isolating a single culprit. The fiscal and trade policy dimension Kashkari has been consistent in attributing the yield movement more to fiscal and trade policies than to anything the Fed is doing with short-ter...