Home / Markets / Stock Markets /  Janet Yellen plays down inflation fears amid surge in US govt-bond yields

Treasury Secretary Janet Yellen played down any concern that the recent surge in U.S. government-bond yields reflects expectations for an outsized breakout in inflation.

“I don’t see that the markets are expecting inflation to rise above" the Federal Reserve’s 2% objective, Yellen said Friday in an interview with PBS NewsHour. “Long-term interest rates have gone up some -- but mainly, I think, because market participants are seeing a stronger recovery."

Yields on 10-year Treasuries stabilized Friday after spiking earlier to the highest in more than a year in the wake of a stronger-than-anticipated February employment report.

Labor Department data showed employers added 379,000 net jobs in February, more than forecast. That dropped the U.S. unemployment rate to 6.2%.

“Although 379,000 jobs sounds like a lot, at that pace it would take us more than two years to get to full employment," Yellen said. The “real" unemployment rate, after factoring in 4 million who dropped out of the labor force after losing their jobs, was more like 10%, she said.

Asked about critiques that the Biden administration’s $1.9 trillion Covid-19 relief legislation was excessive given the economy’s signs of recovery, Yellen pushed back.

“I think we should want a rapid recovery," she said. “We have a large number of workers who are long-term unemployed, and we have to make sure they’re not scarred to the point where this pandemic has a permanent impact on their lives."

The U.S. Senate ground ahead with the bill on Friday, with expected passage over the weekend along strictly partisan lines.

Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout