K.C. Fed’s George: Balance sheet debate needs to account for bond inversion risk
(Reuters) – The brief inversion of the U.S. bond yield curve on Tuesday is a cautionary sign for the Federal Reserve that may need to be factored into coming debates on management of the central bank’s balance sheet, Kansas City Fed President Esther George said on Wednesday.
George said she was less concerned about what the brief, negative spread between 10-year and two-year Treasury securities signaled about a possible recession, as about the implications for financial stability and the stress it could put on bank lending models.
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