So yeah, another day, another largely fruitless effort to figure out what exactly the message is from DM central bankers.

Yellen was, well, Yellen, and her second day on Capitol Hill brought little in the way of surprises although there was this:

It is premature to conclude the underlying inflation trend is falling well short of 2 percent. I haven’t reached that conclusion.

That hit just after 10:10 EST, and it was immediately interpreted as an attempt to walk back yesterday’s dovishness. As Bloomberg notes, “selling peaked at 10:13 a.m. in New York as S&P 500 quickly lost 0.2% to trade 0.1% lower before recovering above 2,446.

And then later, we got this from Lael Brainard

Asset valuations historically aren’t way out of line, but elevated I would say, relative to historical averages.

You can see just how sensitive market are to anything from the Fed with regard to inflation and financial conditions (read: asset prices) in the following charts:

“Yellen’s comments were a bit less dovish than yesterday, so a few people decided to take a few chips off the table” Matt Maley, an equity strategist at Miller Tabak & Co. told Bloomberg. “Let’s face it, the Fed has still switched to a tightening mode, so it’s not like she has given market participants a major green light this week.”

Matt, I’m not sure that last part is entirely accurate, because what we got on Wednesday certainly seemed greenlight-ish to me. After all, it wasn’t like anyone was going to look through Yellen’s dovish lean and trade off Poloz in the overnight.

Anyway, Treasurys bear steepened after a tailing 30Y auction, and as Bloomberg notes, the “morning session saw bonds pressured onto lows as futures extended EGB-led losses through overnight lows.”