Fed's Williams: Rising Bond Yields Reflect Strong Economy

Federal Reserve Bank of New York President John Williams downplayed the idea that rising long-term bond yields are driven by inflation fears, saying they instead reflect a strong U.S. economy.

In a CNBC interview, Williams attributed the increase in real-world borrowing costs to a solid economic outlook fueled by big investments in AI and data centers, rather than worries over inflation.

Market moves have rattled investors and prompted action by the Treasury Department aimed at helping limit the increase. The federal funds target rate range is currently 3.5% to 3.75%, and many central bankers have signaled alarm at the persistence of inflation over the 2% target.