1:27from 22:31
FOMC Press Conference, September 16, 2026youtube.comClip transcript
- 0:00But why did yields rise, let's say, since the last FOMC meeting till this?
- 0:06I'll give you three reasons, but I would say these things tend to be overdetermined.
- 0:10This is a complicated set of things that are affecting the most important asset anywhere
- 0:15in the world, the 10-year Treasury.
- 0:17It's the risk-free asset upon which every price of virtually every asset in the world
- 0:23is related to.
- 0:24So I'll say three things.
- 0:26First is economic strength.
- 0:27I think part of the reason why we've seen over the course of 2026 long-term yields go
- 0:32up is the economy is strengthened.
- 0:36Second reason, competition for capital.
- 0:40The surge in capital expenditures, which I referenced in my remarks, is real.
- 0:46And the so-called hyperscalers are out in the market raising funding.
- 0:50And so the competition for capital is real, and I think it partly explains the increase
- 0:54in yields.
- 0:56The third is geopolitics.
- 0:58The situation in hotspots around the world are driving long-term yields.
- 1:05It's not simply spot prices of energy or spot prices for corn or soybeans or wheat, but
- 1:12it's the difference between those spot prices and so-called crack spreads, what that means
- 1:17for products that find their way into stores across the country.
- 1:22So I think those are the three leading explanations, but certainly not an exclusive list.
Didn't expect corn and soybeans in a Fed chair's answer about bond yields, but there they are, right next to crack spreads, which is the refiners' cut between crude and the diesel that goes in a tractor. His other two reasons long rates are up are a strong economy and hyperscalers out raising money, so my land note is competing with data centers for dollars. I can't do a thing about any of the three, and my operating line floats, so the quarter point lands on top.