Economic data was stronger this morning with the best ISM Manufacturing "business activity" reading since 2011.  Along with comments from Fed's Powell, this kept the pressure on rates heading into the afternoon.

Then, in a classic case of "buy the rumor, sell the news" (or vice versa), bond markets "bought the news" of a likely Fed rate hike in March after selling the rumor for the entirety of the week.  

Let's break that down...

Traders were pricing in a decent chance of a Fed rate hike to begin the week.  The probability spiked on Tuesday after Dudley's comments and continued higher for the rest of the week.  By the time Yellen's speech rolled around this afternoon, rate hike odds were already as high as they could possibly be, so rates had nowhere to go but back down after she added her confirmation that a hike was likely warranted at the next meeting.

It's actually really that simple, unless you want to entertain the possibility that some traders may have been on guard for Yellen to talk about something even more sinister than a rate hike on March 15th.