8/22, 2:35 PM (Source: TeleTrader)
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Fed's George not worried about possible recession

The rise in negative-yielding debt to $17 trillion on a global scale is "incredible," the president of the Federal Reserve Bank of Kansas told CNBC and asserted the phenomenon is "part of an experiment" to see whether extremely low borrowing costs have the "stimulative effect" that central bankers want. In an interview shown on Thursday, Esther George stressed she doesn't see yields going below zero in the United States "right now," citing persistent economic growth, and brushed off the notion that latest signals point to a recession coming.

There is no indication of a downturn, the hawkish policymaker said and claimed she is not worried. She also attributed higher interest rates in the US than other developed markets to stronger economic expansion.

The brief inversions in a closely watched part of the Treasury yield curve could be the effect of the Fed's large balance sheet pressuring the long-term section and partly caused by a global slowdown, according to George, who did acknowledge negative spread between the ten-year and two-year gauges have been registered before all recent contractions in gross domestic product.

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