Bond Sell-Off Continues After Yellen Testimony

Investors were busy selling bonds Thursday, first after disappointment with stimulus measures announced by the European Central Bank, and then after Fed Chair Janet Yellen gave an upbeat assessment of the U.S. economy to Congress.

The benchmark 10-year Treasury had climbed a stunning 14 basis points to an intraday high of 2.324% by 12:30 p.m. ET, according to Tradeweb.

To put the move in perspective, the popular iShares 20+ Year Treasury Bond exchange-traded fund ( TLT ) was down nearly 2.7% in price -- roughly the same as a 475-point drop in the Dow. The broader iShares Core US Aggregate Bond ( AGG) was down .6%.

Yellen told Congress that the labor market is in good shape and that inflation will get back to a healthy level of around 2% next year. She continues to say that monetary policy will remain accommodative and that any rate hikes will be gradual and depend on economic data.

Investors are positioning their portfolios ahead of Friday's November non-farm payroll report. If that number is close to expectations, expectations for a Fed rate hike will be pretty much locked in.

More at Barron's Income Investing blog, http://blogs.barrons.com/incomeinvesting/

(END) Dow Jones Newswires

December 03, 2015 13:36 ET (18:36 GMT)