The yield on the benchmark 10-year Treasury note hit a high of 2.67 percent, and was trading at 2.285 percent, while the yield on the 30-year Treasury bond was also higher, at 3.0 percent. Yields move inversely to bond prices.
Yellen appeared before Congress in Washington, D.C. In prepared remarks, Yellen said a rate hike could be "appropriate relatively soon," adding there are dangers to waiting too long to tighten monetary policy.
"While stopping short of ensuring a second-round increase at the upcoming meeting just four weeks from now, the Chairman noted a rate increase could come 'relatively soon if incoming data provide some further evidence of continued progress toward the Committee's objectives.' In other words, barring an indication of momentum tilting to the downside, even maintaining the moderate status quo should be enough to sway Committee members in favor of a second-round hike by the end of the year," Lindsey Piegza, chief economist at Stifel Fixed Income, said in an email.
On the data front, housing starts soared more than 25 percent in October, while weekly jobless claims dropped to their lowest level since November 1973. Meanwhile, October CPI rose 0.4 percent, in line with expectations.
CNBC's Patti Domm and Fred Imbert contributed to this report
Correction: This story has been revised to correct the spelling of Janet Yellen's last name in one reference.