(Bloomberg) -- Treasuries rose after Federal Reserve Chair Janet Yellen signaled that a change in the central bank’s guidance on interest rates won’t lock it into a timetable for raising borrowing costs.

The yield on the benchmark 10-year note fell below 2 percent for the first time in a week as Yellen repeated in testimony before Congress that a pledge to be “patient” means an increase is unlikely for “at least the next couple” of meetings. She said the labor market wasn’t fully healed and that she saw no evidence that inflation was rising toward the central bank’s 2 percent goal.

“There’s a bit of a relief trade here that she wasn’t hawkish,” Michael Materasso, who helps oversee $348.3 billion of bonds as co-chairman of the fixed-income policy committee at Franklin Templeton Investments in New York. “Yellen tried to give a balanced outlook in terms of mentioning some of the positives, like how the employment picture has improved, but at the same time didn’t want to provide us with anything close to a timetable.”

And:

“It is important to emphasize that a modification of the forward guidance should not be read as indicating that the committee will necessarily increase the target range in a couple of meetings,” Yellen said. “We are reasonably confident that inflation will move back to our 2 percent inflation target over time.”

David Fuller's view

This sounds pragmatic to me.  Given the Dollar Index’s sharp rally since last July and the weakness of commodity prices, there is no need for the Fed to raise rates at this time.