Fed's Williams Says Inverted Yield Curve Powerful Recession Sign
- Next president of New York Fed doesn’t expect curve to invert
- Says longer-term yields to rise as Fed gradually hikes rates
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John Williams, who takes the helm of the powerful Federal Reserve Bank of New York in June, played down risks the yield curve would become inverted as the U.S. central bank gradually raises interest rates.
Speaking in Madrid Tuesday, the current president of the Fed’s San Francisco branch said a truly inverted yield curve “is a powerful signal of recessions” that historically has occurred “when the Fed is in a tightening cycle, and markets lose confidence in the economic outlook.” That is not the case now, he said.