James Bullard, president of the Federal Reserve Bank branch in St. Louis, while addressing questions at an event, said that a wider variety of treasury spreads need to invert and stay there for several months before concluding that it is sending a clear recession signal.
The spread between the yields on the 10-year and three-month treasury notes inverted (dropped below zero) last week for the first time since 2007, triggering recession fears. A widely-followed spread between the 10-year and 2-year yields is still holding well above zero.
Key quotes
- Sees continuity in monetary policy regardless of who might join the Fed.
- Sees likely rebound of growth in the 2nd quarter and rest of year, with the economy still in good shape.
- it is premature to contemplate a rate cut now.
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