Skip to content
Subscriber Only

Bernanke Accentuates the Dovish Side of Fed Policy

Federal Reserve Chairman Bernanke on July 17, at what might be his final Capitol Hill appearance
Federal Reserve Chairman Bernanke on July 17, at what might be his final Capitol Hill appearancePhotograph by Douglas Graham/CQ Roll Call via Getty Images

Federal Reserve Chairman Ben Bernanke didn’t announce any changes in monetary policy in congressional testimony today, but his linguistic stylings definitely had a dovish feel. Bond investors seemed to take the testimony as an indication that the Fed will keep rates low for longer than they’d expected, and Treasury 10-year yields fell to the lowest in two weeks.

The yield on 10-year Treasury bonds rose sharply from around 1.6 percent in early May, to over 2.7 percent in early July, as investors concluded that the Fed was getting set to taper its purchases of long-term bonds. Lately, though, Bernanke and other Fed policymakers have been pushing back against that perception and 10-year yields have edged back down. They fell in early trading today to just under 2.5 percent.