U.S. Treasury Yields Extend Climb After Powell's Comments

By Sam Goldfarb and Sebastian Pellejero

U.S. government-bond prices fell Thursday after Federal Reserve Chairman Jerome Powell said the central bank's current policy stance is appropriate, disappointing some investors who had been hoping that he might signal greater concern with the recent increase in Treasury yields.

The yield on the 10-year Treasury note, which rises when bond prices fall, recently traded at 1.538%, according to Tradeweb, up from 1.479% before the start of Mr. Powell's interview at The Wall Street Journal Jobs Summit and 1.469% Wednesday.

Mr. Powell said the recent increase in Treasury yields had caught his attention and suggested the Fed might intervene if overall financial conditions tightened much further. But he stopped well short of signaling that the Fed was anywhere close to increasing the amount of long-term Treasurys that it buys each month in an effort to contain yields, as some investors had thought was possible.

"The market had clearly set itself up for more guidance than the Fed's prepared to give right now," said Jim Vogel, interest rate strategist at FHN Financial.

Before Thursday, Treasury yields had logged one of their sharpest increases in recent years, with the 10-year yield having climbed from about 0.9% at the start of the year.

Investors and Fed officials alike say that rising yields generally reflect a brightening outlook, thanks to the distribution of coronavirus vaccines and large amounts of government stimulus.

Higher yields, though, could also drag on the economy by increasing borrowing costs for individuals and businesses, leading some to think that the Fed might try to stop them from rising further.

Write to Sam Goldfarb at [e-mail] and Sebastian Pellejero at [e-mail]

(END) Dow Jones Newswires

03-04-21 1402ET