Wall Street Conspiracy Theory: Fed Chair Raises Long-Term Yields

Market speculation is swirling around Federal Reserve Chairman Waller, suggesting he intentionally raised long-term U.S. Treasury yields during a press conference to tighten financial conditions.

A report from Bank of America Securities refutes this claim, stating that the logic behind it does not align with the Federal Reserve's operational framework and would unlikely gain support from the FOMC.

The report notes that long-term U.S. Treasury yields rose significantly after the July FOMC meeting, and inflation breakeven rates widened, leading some clients to infer that Waller was deliberately raising rates to counteract loose financial conditions and investment booms.

However, Bank of America's rate strategist Mark Cabana and economist Aditya Bhave directly refuted this judgment, stating that other FOMC members would not buy into it either.