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Treasury yields trim gains ahead of Yellen testimony

Treasury yields trimmed gains ahead of Yellen testimony even though the statement prepared for delivery to the House Financial Services showed the central bank chief is no mood to back off from gradual path of tightening.

As of now, the 10-yr treasury yield is trading one basis point higher around 1.739%. The yield was up by around four basis points in the early US session.

The 2-yr yield, which mimics short-term rate hike bets, now trades almost three basis points around 0.726%. The Fed-funds futures market still implied an almost zero chance of rate increase in March after Yellen’s comments.

Yellen sounded a bit more cautious about the outlook for the US economy in her statement, but maintained the situation remains in favor of a gradual path of tightening.

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