Greater clarity over an interest rate hike could come on Tuesday or Wednesday as Federal Reserve Chair Janet Yellen speaks with Congress. The question-and-answer session after Yellen’s official remarks will be key, said Quincy Krosby, market strategist at Prudential Financial.
“If she veers away from the script that may move yields,” Krosby said. She referenced an 11-basis point move in the 10-year U.S. Treasury yield when former Fed Chair Ben Bernanke dropped hints about a taper during a congressional testimony two years ago.
U.S. bond yields edged lower on Monday, with the benchmark 10-year yield falling to 2.06 percent and the two-year yield falling to 0.60 percent from above 0.65 percent earlier in the day. Yellen will address the Senate Banking, Housing and Urban Affairs Committee at 10 a.m. on Tuesday and the House Financial Services Committee on Wednesday.