Selling in U.S. government bonds gained steam Thursday after Federal Reserve Chairman Jerome Powell said the central bank’s current policy stance is appropriate, disappointing some investors who had hoped 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, settled at 1.547%, 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 tighten much further. But he stopped short of signaling that the Fed was close to buying more long-term Treasurys 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.