Congress must put U.S. back on sustainable fiscal path: Williams

SALT LAKE CITY Fri Nov 2, 2012 6:00pm EDT

SALT LAKE CITY (Reuters) - The Congress must act to put the United States back on a sustainable fiscal path or risk bond vigilantes betting against U.S. Treasuries, a top Fed official said on Friday.

Critics have accused the Fed of enabling Congress to avoid tough fiscal decisions by pushing interest rates downward, making it easier for the U.S. federal government to borrow.

San Francisco Fed President John Williams told a group of about 200 community leaders here that everyone agrees the current fiscal path is not sustainable, and Congress knows that interest rates will eventually rise.

If Congress does act, he said. "I don't the bond vigilantes will bet against Treasury bonds." But if it does not, he said, it could undermine confidence in the U.S. bond market.

(Reporting by Ann Saphir)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Recommended Newsletters

Reuters U.S. Top News
A quick-fix on the day's news published with Reuters videos and award-winning news photography and delivered at your choice of one of four times during the day.
Reuters Deals Today
The latest Reuters articles on M&A, IPOs, private equity, hedge funds and regulatory updates delivered to your inbox each day.
Reuters Technology Report
Your daily briefing on the latest tech developments from around the world from Reuters expert tech correspondents.