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Chair: Treasury yields rose sharply between meetings as markets 'play the ball, not the referee'
Summary
The chair said nominal and real Treasury yields were materially higher since the previous meeting and suggested reduced forward guidance and fresh data prompted the change in market pricing.
The Chair said "nominal and real yields are materially higher across the treasury curve" since the committee's last meeting and called some of the intermeeting moves "among the most significant in the last 2 decades." He suggested that market participants may be responding more to incoming data and less to Fed signals, saying market participants are "learning to play the ball, not the referee."
The statement framed higher yields as partly a product of reduced forward guidance and real economic developments rather than committee action. The chair said this shift could be constructive because it relieves the Fed from being the constant center of attention while preserving the option to act if conditions change.
