Powell Testimony Drives Up Shorter-Term Bond Yields

Federal Reserve Chair Jerome Powell on Tuesday told the Senate Banking Committee that getting inflation back to the central bank’s 2% target has “a long way to go and is likely to be bumpy.” Photo: Al Drago/Bloomberg

By Sam Goldfarb

and Matt Grossman

Updated March 7, 2023 4:03 pm ET

Yields on shorter-term U.S. Treasurys climbed to new milestones Tuesday after Federal Reserve Chair Jerome Powell said that the central bank would likely raise interest rates higher than previously expected and was ready to accelerate the pace of rate increases if necessary.

Especially sensitive to changes in the near-term interest-rate outlook, short-term Treasury yields jumped immediately after the text of Mr. Powell’s congressional testimony was released in the morning. They then added to those gains even as yields on longer-term Treasurys gave up some of theirs.