Fed Chair Powell asked about prospect of reducing balance sheet via selling MBS and how quickly if so. Bonds extend session highs (USZ2 tapped 130-24 high; 30YY falls to 3.5078% low) as Powell says they will consider selling "once balance sheet runoff is well under way," but it is not something they are considering now or in the near term.

"It's something we will turn to, but the time for turning it to is not close," Powell said.

• Notably, 2YY back below 4.0 at 3.9908% (+.0244) after hitting 4.1168% immediately after FOMC.