St. Louis Fed head Bullard worried about rising US yields

FXstreet.com (Barcelona) - St. Louis Fed President James Bullard expressed his worries about the increase in the benchmark US 10-year bond yields, after they hit a two-year high on Thursday.

"I think it is a concern," he admitted, speaking at the Breakfast with the Fed event sponsored by the Bank’s Louisville Branch. He added however that "the level of yields now is still quite low by historical standards."

Bullard referred to the situation of the US housing market, which in his opinion is strong enough overcome the higher yields. He also suggested there were currently no major asset bubbles which could undermine financial stability in the US.

As far as the Fed QE tapering prospects are concerned, Bullard reiterated that reducing asset purchases too aggressively could lead to a further drop in inflation. That is why initially QE could be scaled back only by a small amount.