Lael Brainard, one of the Federal Reserve’s Washington-based governors, on Tuesday offered the first major hint that a wild ride in bond markets over the past week may have raised alarms at the U.S. central bank.
“I am paying close attention to market developments — some of those moves last week and the speed of those moves caught my eye,” Ms. Brainard said, speaking at a Council on Foreign Relations webcast. “I would be concerned if I saw disorderly conditions or persistent tightening in financial conditions that could slow progress toward our goal.”
Ms. Brainard’s comments came after government bond yields climbed last week, a jump that rippled through financial markets. After dropping as low as about 0.5 percent in 2020,
the yield on a 10-year Treasury note — basically the rate the United States government must pay to borrow money for a decade — jumped above 1.6 percent on Thursday. It has retreated since, and by Tuesday it was around 1.41 percent.
The recent rise in bond yields seems to be driven by a belief among investors that growth and inflation will shoot higher this year, which could prompt the Fed to pull back on its support for the economy and markets sooner than previously expected. Fed officials have been clear that they will be patient in removing their policy help and that although they expect price gains to pop later this year, the increase is unlikely to last.
Fed officials had maintained a sanguine tone as bond yields climbed last week.
“In a way, it’s a statement of confidence on the part of markets that we will have a robust and ultimately complete recovery,” Jerome H. Powell, the Fed’s chair, said of climbing yields during congressional testimony earlier last week.
But higher government bond yields also affect borrowing costs for everyone from home buyers to big companies, and the sudden jump startled investors.
Analysts had been waiting for the Fed to voice concern about the move, or even to hint that they might do something to bring yields down. Some said the tumult on Thursday in particular felt reminiscent of trading in the early days of the pandemic last March, when Treasury markets careened out of control until the Fed intervened.
Mary C. Daly, the president of the Federal Reserve Bank of San Francisco, noted on a call with reporters on Tuesday that the Fed has ways to control rising yields, should it choose to.
“We do have these other tools, and one of them is changing the composition of asset purchases,” she said, referring to a policy in which the Fed could shift toward buying more longer-term bonds in a bid to hold down interest rates.
Ms. Daly said that while she and her colleagues think about such policies on a regular basis, she isn’t worried about the yield moves so far.
The audience for NBC’s Sunday night broadcast of the Golden Globes fell dramatically, with 6.9 million people watching the annual Hollywood ceremony, according to Nielsen.
Even by the standards of declining award-show ratings, this one was a whopper. The viewing audience shrank by 62 percent compared with last year’s show, which drew more than 18 million people. It was the smallest audience for any Globes ceremony since NBC started broadcasting the event in 1996.
The show had a lot going against it. Because of the pandemic, it was moved out of its customary January time slot, meaning it lost its usual lead-in, a National Football League playoff game. This year’s event also skipped the red-carpet parade of stars wearing the latest in fashion from name designers.
Hosted by Tina Fey and Amy Poehler on separate coasts, the ceremony took place in front of a small crowd of emergency medical workers and others with essential jobs instead of Hollywood celebrities seated elbow-to-elbow in the cramped Beverly Hilton ballroom as drinks flowed. With winners and nominees beamed in remotely, the night also included technical glitches. And because movie theaters have been shut down, viewers were not as likely to have seen — or even to have heard of — many of the movies that were up for awards.