Fed Chair's warning on prolonged rate hikes causes Treasury yields to decline.

On Wednesday, U.S. Treasury bond yields decreased slightly following Federal Reserve Chair Jerome Powell's statement that prolonged high interest rates could hinder economic expansion.

The 10-year Treasury yield decreased by one basis point to 4.2880%, while the 2-year Treasury note yield remained relatively stable at 4.6284%.

Prices and yields move in opposite directions. A basis point is equivalent to 0.01%.

Despite some recent cooling, Powell stated on Tuesday that the economy and labor market remain strong.

"While we have made progress in reducing inflation and cooling the labor market, we must also consider the risk of elevated inflation. However, we must also be cautious about reducing policy restraint too late or too little, as this could negatively impact economic activity and employment."

Powell stated that policymakers are still committed to achieving their target of reducing inflation to 2%, despite some easing in inflation.

The central bank leader's speech was part of a two-day appearance at Capitol Hill. He will be delivering his semiannual monetary policy report to Congress and appearing before the Senate Banking Committee on Wednesday.

The consumer price index (CPI) reading due Thursday and the producer price index (PPI) on Friday are crucial economic data that investors are eagerly anticipating. These indices are viewed as important indicators of the market's outlook and the likelihood of interest rate cuts.