Interest rates fell sharply in the Treasury market Wednesday after Federal Reserve Chairman Ben Bernanke issued a downbeat assessment of the U.S. economy.
Bernanke's comments before Congress sent stock prices plunging and Treasury prices sharply higher. The Fed chief said the outlook for the U.S. economy was "unusually uncertain" and that the Fed didn't plan any immediate steps to try and stimulate economic activity.
The dimmer forecast for the economy sent the yield on the 10-year Treasury note down to 2.88 percent, its lowest level since April 2009. The yield stood at 2.96 late Tuesday.
Treasury prices had been trading mixed before Bernanke's testimony but moved sharply higher after he began delivering his comments in the mid-afternoon.
In addition to saying the U.S. economic outlook was uncertain, Bernanke also said that progress in reducing the nation's unemployment rate, now at 9.5 percent, is now expected to be "somewhat slower" than previously believed.
The price of the 10-year note rose 62.5 cents to $105.219. Treasury prices and yields move in opposite directions. The yield on the 10-year note helps set interest rates on mortgages and other kinds of loans.
In other trading, the yield on the two-year Treasury note fell to 0.57 percent from 0.59 percent the day before, while its price rose 6.25 cents to $100.098
The 30-year bond's yield also fell sharply, dipping to 3.89 percent from 3.98 percent. Its price rose $1.688 to $108.469.
The three-month Treasury bill's yield was unchanged at 0.15 percent. Its discount was 0.16 percent.
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