Federal Reserve Bank of Cleveland President Beth Hammack said long-term Treasury yields are being driven higher by a stronger growth outlook, concerns about government debt and expectations for additional interest-rate increases from the US central bank.

"I think there are a number of things at play. One is I think that the growth numbers have come in in pretty solid way, and I think that it’s expectations of continued performance," Hammack said Friday at a conference hosted by the Cleveland Fed.

"There’s some element of what the Fed’s reaction function might be and what policy moves might need to be," said Hammack, adding that investors are pricing in more rate hikes from the Fed. Hammack, who spent three decades at Goldman Sachs before joining the Fed in 2024, said investors have been watching government spending and mounting debt. Fed officials voted unanimously last week to raise their benchmark interest rate by a quarter percentage point. Investors have also raised their expectations for rate increases, assigning about a 65% probability of a hike in October.