Most of Yellen's congressional testimony today was occupied by political axe-grinding rather than thoughtful dialogue on the path of monetary policy.  But on the occasions where she was given the opportunity, Yellen didn't raise any major red flags regarding the immediacy of the first rate hike.  That part--as it turns out--was about as clear as it was going to get at 8:30am when her prepared remarks were released.

On the topic of the Fed's policy path, Yellen hasn't deviated from the script recently.  Today was no exception as she said she still sees the first hike in 2015.  With that, markets braced for impact, relatively speaking.  It wasn't much of a 'bracing,' but enough to push 10yr yields from 2.39 to 2.43. MBS experienced the same episode as a drop from 102-25 to 102-16 in Fannie 3.5s.

From there, bonds had already begun to recover by the time Yellen began answering questions. Once she made it clear that the Fed really was 'data dependent' and would not be interested in raising rates if it risked causing a recession, the rally commenced.  Gains topped out in the afternoon with most lenders repricing positively along the way.

Was today all about Yellen?  Certainly not.  European markets actually rallied better, and it could be argued that US bond markets were simply waiting to make sure Yellen didn't say anything alarming before catching up with the European rally.  US rates were also hampered, at first, by a few big corporate bond deals (which add selling pressure in Treasuries).