Federal Reserve watching bond market as investors look beyond U.S., Kashkari says

The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, said on the “Squawk box” of CNBC that the Central Bank closely monitors the financial markets for signals on inflation expectations and the confidence of investors in the United States, in the midst of upward bond yields and a dollar in weakening.

Kashkari said It is “difficult to read what is going on below”, noting that recent market movements reflect both economic uncertainty and the feeling of change of investors to the United States as a global investment destination.

THE Federal reserve The civil servant has recognized a potential short -term increase inflation The expectations and declared that the priority of the central bank remained preventing these short -term concerns from integrating into the longer -term economic perspectives.

“I pay attention to the same market as you all ement,” he said. “The bond market, I pay particular attention to try to understand what it tells us about the underlying inflationary dynamic. And it is a complicated thing to analyze.”

Dollar Discines rover questions in the middle of trade tensions

Kashkari also discussed the recent weakening of the US dollar, which surprised certain analysts given the usual model of “security flight” during periods of global economic stress. He noted that a downturn, combined with high bond yields, could report confidence with confidence in American assets.

“If investors decide:” Hey, we want to invest elsewhere “, everything else is equal, this should push the yields,” he said. “And you would see this in what we call the term prevails.”

Kashkari said that part of the recent market volatility could come from leverages, including hedge liquidation funds in the middle of capital reductions. But wider trends suggest that the United States may no longer be considered the default investment destination that it was in the past.

“I always come back to the fundamentals,” said Kashkari. “Why do we have a trade deficit in America? It is because investors around the world considered America as the best place to invest. If that changes, the whole equation changes.”

What it means for cryptographic markets

A weakened dollar and inflation uncertaintyBTC) and other cryptocurrencies as alternative value reserves.

Historically, the crypto took advantage during periods of devaluation of the fiduciary currency or when confidence in traditional financial systems vacillates. If investors continue to consider the American economy as less attractive, digital assets can draw capital flows in search of a diversified and decentralized exhibition.