#FedSeesTreasuryMarketFunctioningWell

Fed says the Treasury market is function "fine." Should investors still worry about higher yields?

The Minneapolis Fed President Neel Kashkari pushed back against concerns over higher U.S. Treasury yields, citing a functioningTreasury market with enough liquidity.

The 10 year Treasury yielded slightly below 4.73% last week, while 30 year yields remained high.

The 10 year Treasury yields just under 4.73%

Fed thinks the Treasury is functioning fine

Liquidity levels have held firm

The Fed has said they will focus solely on monetary policy in dealing with inflation as long as The Treasury market isn't stressed.

There's an important distinction to be made, elevated yields don't always suggest The Treasury is stressed. As long as liquidity remains solid and prices in the market work as expected, then The Fed can continue to focus on inflation and the impact it's having on monetary policy without dealing with a distressed bond market.

However, they are still significant for investors. Higher yields translate to mortgage rates, cost of capital to businesses, stock prices, the value of The dollar and even crypto liquidity. Persistent high yields could significantly tighten conditions across several markets.

What the market fears isn't The stress on Treasury market itself, but rather whether higher yields mean inflation continues to be the primary focus, or greater concerns about government debt.

Despite The Fed maintaining that The Treasury market is running healthy, yields are a sensitive indicator for the rest of the world.

Do you consider 4.7%+ 10 year yields a good price adjustment, or are high yields a significant risk to stocks and the crypto markets?

‍#Treasury #GateSquare