Us Treasury Yields Sharply Fluctuate On Comments By Fed’s Harker

US Treasury yields retreated on Wednesday’s session, despite the significant improvement in the US retail sales figures which came as a result of statements out of the Federal Reserve that reflected the adherence of members of the Central Bank’s Board of Governors not to exceed the rate hike next March by 0.25%.

Although still above the record level of 2.00%, US bond yields fell to 2.042% ahead of the previous session’s close of 2.048%.

Patrick T. Harker, member of the Federal Reserve Board of Governors, expressed his insistence on raising interest rates by only 0.25% next March.

Harker said the Fed “needs to get on a good track while dealing with inflation without hurting the economy.”

The Fed member predicted that it would take at least two years for inflation to return to the official central bank target of 2.00%.

On the other hand, a member of the Federal Board of Governors, Neil Kashkari, called on his colleagues in the Council to avoid “extremism” in monetary measures, referring to the need to adhere to a balance in raising interest rates.
Harker said Wednesday he wants a small interest rate hike in March and then methodical moves that don’t upset the economy’s strong performance.

“I am very supportive of starting a process of raising the Fed funds rate, which is our primary tool of monetary policy, starting to raise that, and I would support as early as March a 25-basis point increase in that rate,” Harker said, in an interview with the WHYY radio station program Radio Times.