Federal Reserve Chairman Jerome Powell said Tuesday that rising bond yields are a healthy sign of a return to normal, suggesting that the central bank does not feel pressured to further intervene in the market for U.S. Treasuries.

Yields on longer-dated U.S. Treasuries have ripped higher in recent weeks, with the 10-year (^TNX) rising as high as 38 basis points to 1.39% and the 30-year (^TYX) gaining 42 basis points to as high as 2.22% since the last Fed decision on Jan. 27.

Treasury yields pared those gains through Powell’s testimony, as the Fed chairman reiterated the central bank’s intention to “move patiently” with its easy money policies.

“In a way, it’s a statement of confidence on the part of markets that we’ll have a robust and ultimately complete recovery,” Powell told the Senate Banking Committee.

Bond yields generally go up when investors are willing to take on more risk. U.S. government debt is perceived as a safe haven and relatively risk-free asset, and higher bond yields suggest lower demand as investors hunt more aggressively for returns in other asset classes.

The Fed chairman added that higher yields reflect greater optimism over the vaccine rollout, which could bring more consumer spending and greater corporate profits as the economy re-opens. But the Fed made it clear that in the mean time, policymakers would not pull support.

“Once we get this pandemic under control, we could be getting through this much more quickly than we had feared and that would be terrific, but the job is not done,” Powell said.

Yield curve control

Powell’s remarks did not suggest that policymakers feel the need to depress bond yields through a tool like yield curve control, in which the central bank commits to purchasing U.S. Treasuries of a targeted maturity until their yields fall below stated levels.

Still, the Fed does not appear eager to begin tapering its so-called quantitative easing program. The central bank is committed to buying at least $120 billion a month in U.S. Treasuries and agency mortgage-backed securities until “substantial further progress” is made on the recovery.

Even though Powell suggested that the central bank is seeing enough positive data to revise up estimates on GDP growth for this year, Powell said he could not consider the last three months strong enough to justify a reduction in QE.

“We will continue to clearly communicate our assessment of progress toward our goals well in advance of any change in the pace of purchases,” Powell said Tuesday.

Powell’s message: The Fed will maintain its pace of asset purchases and keep rates near-zero for some time. The Fed has made it clear it will not flinch on rates if inflation rises moderately above 2%, with Powell saying Tuesday that it would be a “good problem” to have upward pressure on inflation — as long as it is not persistent.