Financial markets' response to US elections needs to be monitored, Fed's Tarullo says

The Federal Reserve needed to carefully monitor how financial markets reacted to the US elections but did not need to modify its intended policy path until the economy's response was clearer, Governor Daniel Tarullo said.

Speaking at the Wall Street Journal CEO Council event, Tarullo attributed linked rising bond yields and tightening financial markets to "some expectation of higher growth, higher spending and higher inflation", Reuters reported.

"That is maybe an expectation. Now we will want to watch and see how it manifests itself in actual movement and change in fiscal policy," he said.

As of 1506 GMT the yield on the benchmark 10-year US Treasury note was down by five basis points to 2.21%.