(Reuters) – U.S. Federal Reserve Vice Chair Richard Clarida on Wednesday said he has been surprised by the magnitude of the drop in global government bond yields, but he is not ready to see that as a market signal that the economy faces “secular stagnation.”
Clarida, speaking at an online event hosted by the Peterson Institute for International Economics, said several factors may be behind the move – including fears the resurgence of the coronavirus could hurt economic growth – but he is still analyzing the drop. Nonetheless, he said he did not think the fall has been driven by a drop in inflation expectations.
The benchmark 10-year U.S. Treasury note yield has tumbled by more than half a percentage point since late March and was near a six-month low below 1.15% before Clarida’s remarks. It rose above 1.20% following his comments.
(Reporting By Dan Burns)