Jay Powell, the Federal Reserve chair, has dismissed fears that the recent rise in long-term borrowing costs could be unhealthy for the US recovery, saying markets had adjusted in an “orderly” manner to a brighter economic outlook.

During testimony to the Senate banking committee on Wednesday, Powell sought to stamp out concerns, raised mainly by Republican lawmakers, that the economy could overheat as a result of Joe Biden’s $1.9tn fiscal stimulus package.

Long-term US government debt yields have lept since the start of the year, with the benchmark 10-year note trading at 1.63 per cent, far above the 0.9 per cent level seen in January. However, after hitting a 14-month high of 1.75 per cent last week, the market has stabilised in recent days.