10-year Treasury yield dips as Powell reiterates cautious rate-cutting stance to Congress

The 10-year Treasury yield slipped on Wednesday as investors digested testimony about monetary policy from Federal Reserve Chairman Jerome Powell, saying the central bank is not quite ready to cut rates.

The yield on the 10-year Treasury lost nearly 3 basis points, sitting at 4.108%. The 2-year Treasury rose less than 1 basis point to 4.56%.

Yields and prices move in opposite directions. One basis point equals 0.01%.

In prepared remarks for congressionally mandated appearances on Capitol Hill Wednesday and Thursday, Powell said policymakers remain attentive to the risks that inflation poses and don't want to ease up too quickly.

"We believe that our policy rate is likely at its peak for this tightening cycle. If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year," Powell said.

He reiterated that lowering rates too quickly risks losing the battle against inflation and likely having to raise rates further.

"The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent," Powell said.

Powell also said the central bank would like to see more data when questioned by the House Financial Services Committee on Wednesday. He's also slated to appear before the Senate Banking Committee on Thursday.

Fed officials have said they expect some cuts to take place this year, but have repeatedly said that they are looking for more data evidence that inflation is easing toward the 2% target before they make any policy decisions. They have also broadly steered clear of laying out a timeline for cuts.

Markets were last pricing in rate cuts to begin in June, according to CME Group's FedWatch tool. Two more Fed meetings are scheduled before then.  

On the data front, private companies added 140,000 positions for the month, an increase from the upwardly revised 111,000 in January but a bit below the Dow Jones estimate for 150,000, ADP reported.