(Bloomberg) -- Treasury Secretary Janet Yellen played down any concern that the recent surge in U.S. government-bond yields reflects expectations for an outsized breakout in inflation.
“I don't see that the markets are expecting inflation to rise above” the Federal Reserve's 2% objective, Yellen said Friday in an interview with PBS NewsHour. “Long-term interest rates have gone up some -- but mainly, I think, because market participants are seeing a stronger recovery.”
Yields on 10-year Treasuries stabilized Friday after spiking earlier to the highest in more than a year in the wake of a stronger-than-anticipated February employment report.
Labor Department data showed employers added 379,000 net jobs in February, more than forecast. That dropped the U.S. unemployment rate to 6.2%.
“Although 379,000 jobs sounds like a lot, at that pace it would take us more than two years to get to full employment,” Yellen said. The “real” unemployment rate, after factoring in 4 million who dropped out of the labor force after losing their jobs, was more like 10%, she said.
Asked about critiques that the Biden administration's $1.9 trillion Covid-19 relief legislation was excessive given the economy's signs of recovery, Yellen pushed back.
“I think we should want a rapid recovery,” she said. “We have a large number of workers who are long-term unemployed, and we have to make sure they're not scarred to the point where this pandemic has a permanent impact on their lives.”
The U.S. Senate ground ahead with the bill on Friday, with expected passage over the weekend along strictly partisan lines.
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