Rising bond yields and accompanying inflation fears are adding a level of drama to Federal Reserve Chairman Jerome Powell's appearance this week before Congress.

What's got the market's attention recently has been a pickup in government bond yields, particularly further out on the curve.

Powell's dilemma is this: Rising bond yields could be signaling the reflation of the economy that the Fed has been pushing and are therefore higher for good reasons.

However, should the trend get out of control, the Fed then might have to tighten policy faster than the market expects, offsetting some of the good that has come with the burst in yields.

"The market mood has changed," Mohamed El-Erian, chief economic advisor at Allianz, said Monday on CNBC's "Squawk Box." It's no longer whether yields are going higher, it's when is the move too big.

"I can predict that the yellow lights are flashing all over the Fed because of the [yields] move and the steepening of the yield curve, and the Fed may do more to try to control yields," El-Erian said.

Fed officials have largely dismissed so-called yield curve control to use its bond purchasing power to control rates between various fixed income maturities.

Part of this reflects the fact that bond yields have been steadily rising and equity investors are nervous that the bond market might reach some sort of 'breaking point'" during Powell's testimony