SALT LAKE CITY 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)