Best way to avoid yield curve inversion would be Fed to stand pat, Bullard says

• December 1, 2017
• realestatelife
• Announcements, Business & Markets, Real Estate, Real Estate Finance

The best way to avoid a possible inversion of the bond market yield curve would be for the Federal Reserve to be cautious about raising the policy rate during 2018, St. Louis Fed President James Bullard said Friday in a speech in Little Rock, Ark.

The yield curve has gotten considerably flatter under Fed Chairwoman Janet Yellen’s tenure. Bullard said the yield curve is on track to invert in late 2018 if the Fed stays on the pace of rate hikes suggested in the latest dot plot and longer-term Treasury yields remain near the average since 2012. Bullard said he thought the current positive slope in the yield curve is about right and suggests the current policy rate “is also about right.”