Federal Reserve Chairman Ben Bernanke began day two of his semi-annual Humphrey Hawkins congressional testimony with an appearance before the Senate Banking Committee at 10:30 AM ET.
When asked what was behind the recent rise in long-term Treasury yields, Bernanke laid out three reasons. The first, he said, is improving U.S. economic data, especially those in the labor market. Bernanke then cited the unwinding of risky positions in the marketplace as another reason for the rise in yields, with the third reason being changing market interpretations of Fed policy.
Yesterday's Q&A with the House Financial Services Committee, which ran for more than two hours, didn't move markets much, as most of the discussion focused on fiscal and regulatory policy as opposed to monetary policy issues.
However, the release of Bernanke's prepared remarks yesterday ahead of the testimony sent stocks and bonds higher, as markets interpreted his comments as "dovish."