KEY POINTS
  • "I think the Fed still has a large balance sheet, and that could be putting some downward pressure on those longer-term rates," Kansas City Fed President Esther George said Thursday.
  • The central bank's balance sheet, which stands at around $3.8 trillion of mostly Treasurys and mortgage-backed securities, ballooned to as much as $4.5 trillion as the Fed sought to stimulate the economy out of the financial crisis.
  • George also said she does not see the U.S. getting sucked into the global trend of negative-yielding government bonds.

Kansas City Fed President Esther George said the Federal Reserve may be partly responsible for the yield curve inversion.

"I think the Fed still has a large balance sheet, and that could be putting some downward pressure on those longer-term rates," George told CNBC's Steve Liesman from the Kansas City Fed's economic policy symposium in Jackson Hole, Wyoming.