President Joe Biden on Tuesday agreed to a proposal by Democratic lawmakers to limit or phase out stimulus payments to higher-income individuals as part of his administration's $1.9 trillion coronavirus relief bill.
Wall Street's main indexes have scaled a series of all-time peaks recently, with investors moving into sectors such as energy.
The move has put a brake on a massive spending spree in Hong Kong by mainland traders looking to take advantage of relatively cheap shares in the city.
And it will be up to Janet Yellen, Powell's predecessor as Fed chief who is now Biden's Treasury secretary, to take up the lead in pushing that stimulus package through Congress.
Still, the prospect that rising yields will continue burnishing the dollar's attractiveness has given pause to some investors betting on more declines in the greenback.
Investors awaiting an auction of 30-year government debt shrugged off a report showing an increase in US consumer prices in December amid rising gasoline costs.
In the 12 months through December the CPI advanced 1.4% after increasing 1.2% in November.
Investors are watching to see if the recent rise in yields will lure buyers to today's $38 billion sale of 10-year notes.
The Georgia Senate run-off elections really changed the landscape for the outlook pretty significantly as there is now potentially very significant additional stimulus.
Fed policymakers remain "fully committed to using our policy tools to achieve our goals, in support of a broad-based and sustainable recovery," Mester said.
Minority-owned businesses: $12 billion for minority owned and very small businesses that struggled to access earlier Payroll Protection Program financing.
Spot gold was up 0.5pc to $1,874.14 per ounce at 1030 GMT, having hit a near one-month high of $1,882.76 earlier in the session. U.S. gold futures were up 1.1pc to $1,878.50.
The US central bank said it would also now tie its program of monthly government bond purchases to that same goal.
The language does for the first time however link its $120 billion in monthly purchases of US Treasury bonds and government-backed securities to a set of economic conditions.
Technology shares pushed Wall Street higher on Tuesday, with the Nasdaq ending at a record high, with investors viewing the sector as more resilient to the pandemic.