BOND REPORT: Treasury Yields Dip As Investors Await Yellen

By Sunny Oh Features Dow Jones Newswires

Treasury yields extended a decline Wednesday after the release of Federal Reserve Chairwoman Janet Yellen's prepared congressional testimony as market participants look for details on the timing of the balance sheet reduction and the level of the Fed's desire to raise interest rates this year.

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The benchmark 10-year treasury yield fell 4.4 basis points to 2.313%. Bond prices move inversely to yields. The 2-year note's yield slipped 5.6 basis points to 1.355%, while the 30-year bond lost 1.9 basis points to 2.906%.

See: Republicans to press Yellen on Fed plans to reduce its outsize role on U.S. economy (http://www.marketwatch.com/story/republicans-to-press-yellen-on-fed-plans-to-reduce-its-outsized-role-on-us-economy-2017-07-11).

Yellen will appear before the House Financial Services Committee at 10 a.m. Eastern as part of her semiannual testimony about monetary policy in front of Congress.

In the text, she wrote that the central bank was focused on cutting the balance sheet this year, but did not commit to a date of the next interest rate increase, saying she expected a gradual increase in interest rates in the next few years. Yields fell as analysts interpreted her written testimony as dovish.

Yellen also said a so-called neutral rate, the long-term resting point for the fed-funds rate, was "quite low by historical standards," so it wouldn't have to rise much higher to reach that level.

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Also read: Live blog and video of Yellen's testimony before house panel (http://blogs.marketwatch.com/capitolreport/2017/07/12/live-blog-and-video-of-yellens-testimony-before-house-panel/)

(END) Dow Jones Newswires

July 12, 2017 09:02 ET (13:02 GMT)