U.S. Treasury yields rose Tuesday, with the 2-year's at one point surpassing the 5% mark, after Federal Reserve Chair Jerome Powell said inflation has yet to ease back to the central bank's target.
The 2-year Treasury yield briefly topped the 5% level, but was last trading at 4.981% after rising more than 4 basis points. The yield on the 10-year Treasury rose more than 3 basis points to 4.659%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Treasurys
Fed Chair Powell, speaking at the Washington Forum on the Canadian Economy, cited the lack of progress on inflation, adding to recent concerns the central bank may take longer to lower rates than investors had been anticipating.
"More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal," Powell said.
Those comments echo recent statements from other central bank officials. San Francisco Federal Reserve Bank President Mary Daly recently said there was "no urgency" for the Fed to cut interest rates.
Elsewhere, investors digested recent economic data such as the March retail sales figure that came in far higher than expected, suggesting resilience in consumer spending even as inflation remains persistent.
Heightened geopolitical tensions after Iran's attack on Israel over the weekend also weighed on investors' minds as observers awaited Israel's response and world leaders called for calm and restraint.