Fed's Cook: Expectations of near-term policy rates do not appear to be driving rise in long-term rates

Federal Reserve Governor Lisa Cook said on Monday that expectations of near-term policy rates do not appear to be driving rise in long-term rates, per Reuters.

Key quotes

"Residential and commercial property prices remain above levels historically associated with fundamentals."

"If commercial mortgage delinquency rates force sales, commercial real estate prices could decline sharply."

"Business borrowing is at high levels, but measures of debt servicing capacity remain strong overall due to profits and limited impact of high interest rates so far."

"For some borrowers debt service capacity has begun to show signs of weakness."

"In terms of debt, household sector looks quite resilient, though there are emerging signs of stress for those with weak credit."

"Banking sectors remains sound and resilient overall, acute stresses have abated."

"Vulnerabilities among non-banks could amplify stress of tightened financial conditions and slowing economy."

"Fed cannot anticipate all risks, but can build resilience to shocks; particularly important to enhance resilience of large banks."

Market reaction

These comments failed to trigger a noticeable market reaction. As of writing, the US Dollar Index was virtually unchanged on the day at 105.05.