Bernanke Says Unwinding of Risky Bets Boosts Borrowing Costs
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Federal Reserve Chairman Ben S. Bernanke said rising bond yields partly reflect an unwinding of leveraged and “excessively risky” investments, calling the tighter financial conditions “unwelcome” as monetary policy stays highly accommodative.
The Fed chief, in testimony before the Senate Banking Committee, said the increase in borrowing costs over the past two months is related to “better economic news,” Fed communications about tapering its $85 billion monthly asset purchase program and changing bond-market bets.