Treasury Yields Post Declines After Jerome Powell’s Remarks
Yields on U.S. government bonds fell Friday after Federal Reserve Chairman Jerome Powell signaled that the central bank could start tapering bond purchases this year but reasserted his view that this year’s inflation surge should prove temporary.
The yield on the benchmark 10-year U.S. Treasury note settled at 1.311%, according to Tradeweb, compared with 1.342% Thursday. The yield on the five-year note, which is more sensitive to changes in monetary policy, fell to 0.799% from 0.842% Thursday.
Yields, which fall when bond prices rise, dropped immediately after the Fed released the text of Mr. Powell’s remarks, which were prepared for delivery at a virtual symposium hosted by the Kansas City Fed. They then drifted lower during the rest of the session.
Among the highlights of the speech, Mr. Powell said he was among the majority of Fed officials at the central bank’s latest policy meeting who thought that “if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace” of the Fed’s $120 billion in monthly asset purchases this year.
Investors have long looked forward to the Fed’s annual symposium—which is typically held in Wyoming’s Grand Teton National Park but is being held virtually for the second straight year—for clues about the central bank’s tapering plan.
