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10-Year Treasury Yield Climbs Above 2.9%

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  • The yield on the benchmark 10-year Treasury note climbed on Tuesday as investors digested a fresh batch of economic data and digested comments from Federal Reserve Chair Jerome Powell.
  • That comes shortly after former Federal Reserve Chair Ben Bernanke said the U.S. central bank had made a mistake in waiting to address an inflation problem that has turned into the worst episode in U.S. financial history since the early 1980s.

The yield on the benchmark 10-year Treasury note rose above 2.9% on Tuesday as U.S. retail sales came in about as expected, and investors digested comments from Federal Reserve Chair Jerome Powell.

The yield on the 10-year Treasury note last traded up 11 basis points to 2.988%, while the yield on the 30-year Treasury bond rose about 10 basis points to 3.18%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

Those moves followed shortly after U.S. retail sales numbers came in about as expected. Consumer spending on retail rose 0.9% in April, according to the U.S. Census Bureau. Excluding autos, retail sales rose 0.6% in April.

Powell said at a Wall Street Journal conference that "no one should doubt our resolve" in getting inflation under control.

The Fed chief added that the central banks wants to see "clear and convincing" evidence of inflation coming down before finishing its tightening program, even if that means moving past the so-called neutral range for interest rates.

"If that involves moving past broadly understood levels of neutral we won't hesitate to do that," Powell said. "We will go until we feel we're at a place where we can say financial conditions are in an appropriate place, we see inflation coming down. We'll go to that point. There won't be any hesitation about that."

Yields briefly extended their gains during Powell's remarks.

On Monday, former Federal Reserve Chair Ben Bernanke said the U.S. central bank had made a mistake in waiting to address an inflation problem that has turned into the worst episode in U.S. financial history since the early 1980s.

Speaking to CNBC's Andrew Ross Sorkin in an interview that aired on Monday's "Squawk Box" show, Bernanke said that he understood why the Jerome Powell-led central bank had delayed its inflation response but, in retrospect, this was an error.

Bernanke guided the Fed through the financial crisis that exploded in 2008 and presided over unprecedented monetary policy expansion.

Elsewhere, St. Louis Fed President James Bullard, Philadelphia Fed President Patrick Harker, Minneapolis Fed President Neel Kashkari, Cleveland Fed President Loretta Mester and Chicago Fed President Charles Evans were expected to deliver remarks at separate events.

Industrial production figures rose 1.1% in April, better than consensus estimates of 0.5%.

Capacity utilization jumped 79% in April, about in line with consensus estimates of 78.5% on FactSet. Business inventories jumped 2% in March.

— CNBC's Jeff Cox contributed to this report.

Correction: Retail sales excluding autos rose 0.6% in April. A previous version of this story misstated the increase.

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