US Treasury yields fall after Bernanke speech

U.S. Treasury yields fell Friday after Chairman Ben Bernanke said the Federal Reserve will do more to help the economy if it doesn't improve.

Bernanke stopped short of committing the central bank to any specific move, but investors seemed cheered nonetheless. They bought 10-year Treasury notes, pushing their yield down to 1.56 percent from 1.63 percent late Thursday.

The price of the 10-year note, which moves in the opposite direction to the yield, rose 90.63 cents for every $100 invested.

Some investors have speculated the Federal Reserve will buy government debt to try to lower long-term interest rates and get people to borrow and spend more. Purchases by the Fed tend to drive the price of Treasurys up and their yields down.

In his speech at the Fed's annual conference in Jackson Hole, Wyo., Bernanke said the Fed "should not rule out" new policies to help the economy and enable the unemployed to find jobs. He described the economy as "far from satisfactory." He called high unemployment, now at 8.3 percent, a "grave concern."

In two previous bond-buying programs, the Fed bought $2 trillion in U.S. government debt and mortgage securities. Its last so-called quantitative easing program ended June 2011.

The yield on the 10-year note was nearly 4 percent in Oct. 2008, before the first round of Fed purchases. It hit a low of 1.46 percent twice this year.

In other Treasury trading, the yield on 30-year bond fell to 2.67 percent from 2.74 percent late Thursday. The price rose $1.88 for every $100 invested.

The yield on the two-year note fell to 0.22 percent from 0.26 percent. The yield on the three-month T-bill fell to 0.9 percent from 0.10 percent.

Source: http://news.yahoo.com/us-treasury-yields-fall-bernanke-speech-202946212--finance.html

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