U.S. Treasury Secretary Janet Yellen meets with Mexico’s Central Bank Governor Victoria Rodriguez Ceja during her visit in Mexico City, Mexico December 6, 2023. REUTERS
MEXICO CITY, Dec 6 (Reuters) – U.S. Treasury Secretary Janet Yellen said on Wednesday that bond markets anticipating the Federal Reserve rate moves can be a “helpful complement” to monetary policy if participants are thoughtful about interpreting incoming data.
Yellen, speaking to reporters on a trip to Mexico, declined to comment when asked if bond markets were premature in anticipating Fed rate cuts. But she said that market anticipation of Fed decisions was part of the policy-making mix.
“If markets are thoughtful when reading the data, it can be helpful as a complement to monetary policy.”
Bond yields fell further on Wednesday as private payrolls data showed further cooling in the labor market ahead of Labor Department jobs data expected on Friday.
“Of course, there are risks around that,” Yellen said. “And I can’t rule out the possibility that slowing could be more than is desirable. But I think I’m feeling really good about the economic outlook.”