INDIANAPOLIS (Reuters) - Recent market developments and an expected Federal Reserve interest rate increase means there is a “real risk” of the yield curve inverting this month, St. Louis Federal Reserve bank president James Bullard said on Friday.
Bullard has advocated a pause in rate hikes in part to avoid an inversion, a traditional signal markets are losing faith in growth. Bullard said investors clearly think existing hikes have gone too far, and, rather than raising rates in December, “we have the luxury of patience...We don’t have to be in much of a hurry. If we stretched this out that would be a perfectly logical thing to do.”
Reporting by Howard Schneider; Editing by Chizu Nomiyama