US Markets

Fed's Bullard says only 'sustained' bond inversion would be 'bearish' signal

Credit: REUTERS/Edgar Su

The inversion of portions of the Treasury bond yield curve this week would "have to be sustained over a period of time" to be taken as a "bearish" signal for a U.S. economy, St. Louis Federal Reserve President James Bullard said on Thursday.

WASHINGTON, Aug 15 (Reuters) - The inversion of portions of the Treasury bond yield curve this week would "have to be sustained over a period of time" to be taken as a "bearish" signal for a U.S. economy, St. Louis Federal Reserve President James Bullard said on Thursday.

With economies slowing overseas "you have this flight to safety going on," that is pushing down U.S. rates even though U.S. economic growth is "reasonable," said Bullard in comments that seemed to discount the degree to which recent market volatility may figure into the Fed's next decision on interest rates.

(Reporting by Howard Schneider; editing by Diane Craft)

((howard.schneider@thomsonreuters.com; +1 202 789 8010;))

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