2-year Treasury yield rises slightly after Fed Chair Powell’s latest comments

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The 2-year Treasury yield rose slightly Friday as investors weighed Federal Reserve Chair Jerome Powell's outlook on interest rate policy.

The 2-year Treasury yield climbed 2 basis points at 4.291%. Meanwhile, the yield on the 10-year Treasury rose 4 basis points at 3.688%.

Yields and prices have an inverted relationship and one basis point equals 0.01%.


Federal Reserve Chair Jerome Powell on Friday said that interest rates may not have to rise as much as previously expected given the turmoil in the banking sector.

"The financial stability tools helped to calm conditions in the banking sector. Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation," Powell said.

That follows comments from New York Federal Reserve President John Williams, who said Friday the longer-term trend of interest rates will remain lower, despite raises to curtail inflation.

"Importantly, there is no evidence that the era of very low natural rates of interest has ended," Williams said.

Meanwhile, Federal Reserve Governor Michelle Bowman on Friday called for a separate third-party study to investigate the failure of Silicon Valley Bank and other regional firms.

On Thursday, Dallas Fed President Lorie Logan said she did not believe halting interest rate hikes was justified based on recent economic data. Speaking to bankers in San Antonio, she said progress had been made but upcoming economic reports such as fresh employment and inflation figures would be crucial to the Fed's next rate decision.

That echoed the tone of some central bank officials who hinted earlier in the week that more needed to be done to bring inflation closer to the Fed's target range. Others, however, appeared more cautious, including Chicago Fed President Austan Goolsbee, who told CNBC on Tuesday that the effect of higher rates is not being felt to its full extent yet.

Following its last rate-setting meeting earlier this month, the central bank had hinted that an end to its rate-hiking campaign could be imminent. Many investors welcomed the idea as concerns about elevated rates dragging the economy into a recession have spread.

— CNBC's Jeff Cox contributed to this report.