US bond prices fell on Thursday as Federal Reserve chair Janet Yellen’s remarks during a congressional hearing underscored investors’ confidence that the Fed will raise interest rates in December.

The yield on the 10-year bond rose 3.7 basis points to hit a session high of 2.26 per cent shortly after Ms Yellen’s congressional hearing began around 10am. The policy-sensitive 2-year note also rose 2 basis points to 1.02 per cent.

During the hearing, Ms Yellen said there is a “great deal of uncertainty” in the economy but the “near term risks seem reasonably balanced.” Her remarks were in response to a question on whether a lack of information will prompt the Fed to hold off on a rate hike until next year.

Ms Yellen’s comments were supported by a string of positive economic indicators released earlier that morning. A December rate hike is widely expected by analysts, with federal fund futures pointing to a possibility of 94 per cent.

Stock markets were mixed, with the S&P up 0.2 per cent while the Dow Jones Industrial Average was slightly lower. The Nasdaq Composite rose 0.2 per cent.

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