Treasury yields retreat as Fed Chair warns on keeping rates elevated for too long

U.S. Treasury bond yields dipped slightly on Wednesday following Federal Reserve Chair Jerome Powell’s warning about the potential negative impact of prolonged high interest rates on economic growth. The 10-year Treasury yield fell one basis point to 4.2880%, while the 2-year Treasury note yield remained mostly unchanged at 4.6284%. Powell highlighted the strength of the economy and labor market but cautioned against undue policy restraint, emphasizing the goal of reducing inflation to the 2% target. Traders are also anticipating important economic data including the June consumer price index and the producer price index, which could influence expectations for rate cuts.