Yellen concerned about Treasury market functioning

US Treasury Secretary Janet Yellen mentioned on Thursday that the Financial Stability Oversight Council (FSOC) is concerned about the functioning of the Treasury market.

While Yellen testifies, stocks erased gains printing fresh YTD lows and the dollar strengthened. The DXY is at multi-year highs above 104.70. The 10-year US yield stands at 2.84%, down 3% for the day.

“We had episodes in which liquidity has dried up.” Yellen said as she was giving testimony before the House Financial Services.

Yellen said that she believes the Federal Reserve can bring down inflation without causing a recession because of a strong US job market and household balance sheets, low debt costs and a strong banking sector

Yellen also told a US House of Representatives Financial Services Committee hearing on Thursday that “all of those things suggest that the Fed has a path to bring down inflation without causing a recession, and I know it will be their objective to try to accomplish that.”