Off The Wire
Fed's Bostic: Rising market yields show Fed retains credibility
JACKSONVILLE, Fla., May 11 (Reuters) - Risings interest rates on home mortgages, U.S. Treasury bonds and other key forms of credit show the Federal Reserve remains credible in its pledge to tame inflation, Atlanta Fed President Raphael Bostic said on Wednesday.
"We moved our policy rate 25 basis points and the 30 year (mortgage) moved 2 percentage points. That is tremendous responsiveness," Bostic said in comments to the World Affairs Council of Jacksonville.
"The moves that we have seen in rates and in yields are a sign that the markets still believe the Fed has credibility. They have said what we are going to do and they have priced in us doing them … That is an important dimension in the marketplace."