Hamack: The rise in US Treasury yields is not due to a loss of inflation confidence

Cleveland Fed President Hamack stated that the recent increase in US bond yields is mainly driven by real interest rates, economic prospects, fiscal policy, and competition for funds, rather than the market losing confidence in a decline in inflation. The current inflation expectations remain largely anchored, but sustained inflation above 2% brings actual costs. The biggest risk of inflation is the formation of an inflationary mentality, and the Federal Reserve needs to maintain a restrictive monetary policy. The increase in yields reflects the market's repricing of the Federal Reserve's policies and fiscal policies, and the investment demand in the AI and technology industries is also competing with the bond market for funds. The US fiscal path is unsustainable. (Source: Golden Ten Data)