In anticipation of potential changes to the Federal Reserve’s monetary policy, investors are shifting out of their short-term Treasury allocations and are moving over to longer-dated securities.

“People are prepared for eventual tightening monetary policy from the Fed,” Mary Ann Hurley, vice president of trading at D.A. Davidson & Co., said in a Bloomberg article.

The iShares Barclays 1-3 Year Treasury Bond Fund (NYSEArca: SHY), Schwab Short-Term U.S. Treasury ETF (NYSEArca: SCHO) and Vanguard Short-Term Government Bond ETF (NYSEArca: VGSH) have slightly weakened since Fed chair Janet Yellen gave her statement to lawmakers, but the funds remained flat over the past week.

Yields on short-term Treasury notes are sensitive to interest-rate outlook and have been pressured since Fed chair Janet Yellen signaled that rates could rise sooner-than-anticipated if the labor market continues to improve at a faster clip.

If the economic data strengthens at a faster-than-expected pace, rate hike expectations will push up two-year note yields, or weigh on short-term Treasury prices.

The two-year note’s yield touched 0.536% last week, the highest since September, while the three-year note’s yield briefly crossed 1%, the first time since 2011.

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