Fed's Waller says neutral rate may be higher as safety premium for Treasuries has waned
TLT•Neutral rate estimate may be higher
He said he has long worried that, "There's no more premium for safe, liquid government U.S. government debt."
"And that has been leading me to raise my neutral rate estimate, which means higher policy rates for any given rate of inflation — maybe you're not as restrictive as you thought you were," he added.
Waller says Treasury safety premium has faded
WASHINGTON, Sept 3 (Reuters) - There is no more premium for safe, liquid U.S. government debt, Federal Reserve Governor Christopher Waller told a Reuters NEXT Newsmaker event on Thursday.
Waller said that yields have been rising due to concerns about the fiscal situation, but also because of competition for capital from artificial intelligence infrastructure investment, and growing evidence that the safety premium that pushed U.S. Treasury debt prices up and yields down has waned.
