Treasuries Rally as Fed’s Powell Focuses on Price Stability

US Treasuries rallied for a third day as Federal Reserve Chair Jerome Powell said the central bank will aim to prevent tariffs from leading to stickier inflation.

The five-year note led gains in the US government debt market on Wednesday, with yields down seven basis points to 3.9% as Powell said the central bank was “well positioned to wait for more clarity” on how President Donald Trump’s evolving trade policy impacts price pressures. The moves in yields accelerated as equities slumped more than 2%.

The “bond market is comforted by Powell’s sanguine outlook on funding conditions and reserve abundance, but ...