NEW YORK: US Treasuries prices edged higher on Wednesday after Federal Reserve Chair Janet Yellen's testimony to a House panel was identical to one she delivered Tuesday, reinforcing the view that the Fed could hike interest rates later than mid-year.
Investors interpreted Yellen's remarks on Tuesday as giving the Fed more flexibility to hike later than June.
Analysts watching Yellen for any changes from testimony she gave to a Senate panel Tuesday said the unchanged text supported the dovish interpretation that led yesterday's rally in Treasuries prices.
"Certainly we would be looking for some hint that she's walking us back, but if not the market is following the strength from yesterday," said Aaron Kohli, an interest rate strategist at BNP Paribas in New York.
Investors continued to watch for further comments from Yellen during a question-and-answer session before the US House of Representatives Financial Services Committee.
Yields on benchmark 10-year notes held near more than two-week lows hit early in the session, while 30-year bond yields held near just under two-week lows hit early in the session.
"If she concludes her remarks without making any changes to yesterday's comments, that would suggest she doesn't have an objection to the market's interpretation of her remarks," said Sharon Stark, fixed income strategist at D.A. Davidson in St. Petersburg, Florida. She said that Yellen keeping her stance on monetary policy unchanged could push the 10-year yield lower to 1.95 percent.
Traders also awaited the US Treasury's auction of $35 billion in five-year notes at 1 p.m. EST (1800 GMT).
US 30-year Treasuries were last up 9/32 in price to yield 2.58 percent, from a yield of 2.60 percent late Tuesday. Ten-year notes were last up 4/32 in price to yield 1.97 percent, down from 1.99 percent late Tuesday.
US five-year notes were last mostly flat to yield 1.46 percent, unchanged from late on Tuesday.
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