Traders are working on the floor of the New York Stock Exchange.
NYSE
Wall Street veteran Art Cashin told CNBC on Thursday that investors continue to worry about how the Federal Reserve handles the bond market, leading to hectic trading.
“It doesn’t matter if they’ve lost control or not. If the market thinks it’s lost control, it’s just as dangerous and doomed,” Cashin, UBS’s chief operating officer, told Squawk on the Street.
Cashin’s comments came before Fed Chairman Jerome Powell appeared at the Wall Street Journal Summit around noon on Thursday.
“I don’t think it can have a magic wand,” Cashin said, but stressed that investors want Powell’s assurance that the Fed will be able to “keep track” of bond yields and inflation expectations.
Indeed, US stock indices fell on Thursday afternoon as yields rose during Powell’s interview. The yield move came after Powell did not give a strong indication that the central bank will change its asset purchases.
Cashin mentioned before Powell’s appearance that the Fed president could allay traders’ concerns if he discusses a potential “Operation Twist” in which he sells short-term bills and buys longer-term bonds.