The increase in long-term returns so far is not worrisome

The coronavirus is the engine of the United States economy right now, the president of the Federal Reserve Bank of Kansas City, Esther George, as reported by Reuters.

Additional statements

“The outlook is quite optimistic for the second half of the year; the risks include the logistics around the vaccination program.”

“Fiscal policy will remain important to economic activity in the United States until the virus is in the rearview mirror.”

“It is clear that the combination of mortgages and Treasuries will continue until the economy goes through this critical phase.”

“The debate on buying bonds will begin when it is clear that the Fed is on track to meet its inflation and employment targets.”

“To the extent that economic optimism is behind the rise in long-term bond yields, it is consistent with Fed policy.”

“The increase in long-term yields so far is not a concern and does not reflect tighter financial conditions.”

“Lawmakers will have to deal with the long-term implications of federal debt at some point, but right now the economy needs a bridge to overcome the health crisis.”

“I don’t see a short-term inflation problem.”

“The Fed would look for broad-based and persistent price pressures, not one-time increases in particular industries.”

“If the minimum wage increase is achieved, it remains to be seen whether it will carry over to higher prices.”

“Small businesses say they are concerned about the impact of a higher minimum wage on margins.”

“It is vital to get workers to jobs that exist in the future, to find ways for workers to reorganize, companies to attract employees to occupations in demand.”

Market reaction

The US Dollar Index did not show an immediate reaction to these comments and was last seen posting small daily gains at 90.52.