U.S. Treasury yields were holding their ground on early Tuesday’s trade before congressional testimony from Federal Reserve Chairman Jerome Powell, where he may remark on the precipitous bond-market selloff over the past few weeks.

What are Treasurys doing?

The 10-year Treasury note yield
TMUBMUSD10Y,
1.375%

was steady at 1.369%, while the 2-year note rate
TMUBMUSD02Y,
0.112%

was flat at 0.115%. The 30-year bond yield
TMUBMUSD30Y,
2.205%

gained 1.5 basis points to 2.194%.

Bond prices move inversely to yields.

What’s driving Treasurys?

Bond markets are eagerly awaiting testimony from Fed Chairman Jerome Powell as he faces Congress on Tuesday. Investors are hoping to see if Powell will try to decelerate the recent rise in long-term Treasury yields, and are looking to glean details on what circumstances would lead the central bank to taper its asset purchases.

Budding inflation and growth expectations driven by falling COVID-19 case counts, vaccine rollouts and anticipation of another fiscal relief program are expected to test the limits of the Fed’s new inflation framework.

See: Climbing bond yields globally put central banks ‘in a bind,’ warns economist

Under the strategy, the Fed would allow inflation to maintain a sustained overshoot of its inflation target before pulling back on its supportive policies.

In U.S. economic data, a gauge of consumer confidence for February is due at 10 a.m. ET.

Also having the potential to influence trading, the Treasury Department will sell $60 billion of 2-year notes in the afternoon.

What did market participants say?

“There are ‘credibility issues’ building for the Powell-led FOMC, as a number of matters point to the Committee being ‘far behind the curve’ of actual developments in the economy and likely upon policy,” said John Herrmann, director of rates strategy at MUFG.