The president of the Federal Reserve of Minneapolis, Neel Kashkari Donald TrumpThe trade war degenerates.
With the rise in treasure yields and the US dollar in relation to its global counterparts in recent days, trends are contrary to what you could normally see, said the Central Bank manager during a CNBC “Squawk box” interview.
“Normally, when you see big price increases, I expected the dollar to increase. The fact that the dollar is falling at the same time, I think, gives the history of investor preferences,” said Kashkari.
10 years old Treasury yield has increased this week After Trump announced its intention to slap a tariff of 10% between American trade partners and threatened to impose even more difficult selection levies before retreating on Wednesday.
At the same time, The greenback fell by more than 3% compared to a basket of global currencies, with movements potentially meaninging a misappropriation of American security assets.
“Investors around the world have considered America as the best place to invest, and if this is true, we will have a trade deficit. So now one of the ways that is expressed are in lower yields through asset classes in America,” said Kashkari. “If the trade deficit will decrease, investors may say, OK, America is no longer the most attractive place in the world to invest, and then you expect to see bond yields increase.”
Kashkari, however, noted that he saw “stress” but not significant dislocations in the operation of the market.
Kashkari does not vote this year in the Federal Rate Open Market Committee, but will vote in 2026. He noted that his objective in the current environment is to maintain anchored inflation expectations, echoing the other declarations of political decision -makers who are unlikely to move until there is clearer visibility on tax and commercial policy.
Get your Pro Live ticket
Join us on the New York Stock Exchange!
Uncertain markets? Win an edge with CNBC Pro LiveAn exclusive and inaugural event on the historic New York Stock Exchange.
In today's dynamic financial landscape, access to expert information is essential. As an abnig by CNBC Pro, We invite you join us for our First exclusive event in person CNBC Pro Live at the iconic NYSE on Thursday, June 12.
Join interactive professional clinics led by our pros Carter Worth and Niles, And Dan Ives, with a special edition of Pro Talks with Tom Lee. You will also have the opportunity to network with CNBC experts, talents and other professional subscribers for an hour of exciting cocktail on the legendary soil. Tickets are limited!
