Treasury yields retreat as Fed Chair warns on keeping rates elevated for too long

The relationship between yields and prices of Treasurys is inverse, meaning that when yields increase, prices decrease, and vice versa5. This occurs because as interest rates rise, newly issued bonds offer higher yields, making existing bonds with lower yields less attractive to investors, causing their prices to fall5. Conversely, when interest rates fall, existing bonds with higher yields become more desirable, increasing their prices.

Federal Reserve Chair Jerome Powell appeared at Capitol Hill to deliver his semiannual monetary policy report to Congress6. During his two-day appearance, he spoke before the Senate Banking Committee and the House Financial Services Committee, discussing the state of the economy, inflation, and the Fed's actions to balance economic growth and employment while maintaining their 2% inflation target5.