Treasury yields rose Tuesday as investors digested comments from Federal Reserve Chair Jerome Powell.
The yield on the 10-year Treasury added 2.7 basis points to 4.295%. The 2-year Treasury yield advanced less than one basis point to 4.62%.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
Before the Senate Banking Committee, Powell teased in his testimony that the central bank was thinking about getting less restrictive with its monetary policy.
"Reducing policy restraint too late or too little could unduly weaken economic activity and employment," Powell said in prepared remarks. "More good data would strengthen our confidence that inflation is moving sustainably toward 2 percent."
Bond yields have been falling in recent months with the benchmark 10-year rate declining nearly 40 basis points since May.
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Markets expect the Fed to begin cutting rates in September and likely following up with another quarter-percentage-point reduction by the end of the year. CME Group's FedWatch Tool showed that traders were last pricing in about a 77% chance of rates being cut in September.
Money Report
"While we're not interpreting this as hinting that July could potentially see a cut, it certainly leaves September on the table," Ian Lyngen, head of U.S. rates at BMO, said in a note to clients. "Overall, a modestly dovish skew but nothing that was far enough off-message to trigger durable price action in the Treasury market."
Investors also awaited key data points slated for the week ahead, including fresh consumer and wholesale inflation figures. The consumer price index is scheduled for Thursday, and the producer price index on Friday.
