Treasury yields rise after Powell’s testimony in the Senate

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US Treasury yields rose on Friday morning after Federal Reserve Chairman Jerome Powell acknowledged in Senate testimony that inflation was “well above target”.

The yield on the benchmark 10-year Treasury rose 3 basis points to 1.329% at 5:30 AM ET. The yield on the 30-year Treasury rose 3.9 basis points to 1.958%. Returns move inversely to prices.

Senators questioned Powell Thursday during his second testimony to Congress of the week on monetary policy.

While Powell reiterated the view that rising inflation appears temporary, he also acknowledged that price pressures were well above the central bank’s target.

Inflation and employment growth are determinants of when the Fed will tighten its easy monetary policy.

“We said we would start reducing our asset purchases when we feel the economy has made more of the significant progress measured since last December,” Powell said Thursday. “We are in an active study of it now.”

Treasury Secretary Janet Yellen told CNBC’s “Closing Bell” on Thursday that she believes there will be “several more months of rapid inflation” before price pressures subside.

“I’m not saying this is a one-month phenomenon. But I do think that in the medium term we will see inflation fall back towards normal levels,” she said. “But, of course, we have to watch that carefully.”

In terms of data released Friday, retail sales numbers for June are due at 8:30 AM ET.

The University of Michigan is also preparing to release its preliminary data for July on consumer confidence and inflation expectations at 10 AM ET.

There are no auctions scheduled for Friday.

CNBC’s Thomas Frank and Jeff Cox contributed to this market report.

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