Treasury Yields Plumb Depths --- Two-Year Hits Record Low on Economic-Recovery Concerns
U.S. Treasury prices rose, sending the two-year note's yield to a record low, as concerns over the economic outlook bolstered demand for low-risk assets.</br></br>The two-year yield, the most sensitive to official rate changes, touched a low of 0.565% before ending the session at 0.593%.</br></br>Speculation among market participants that Federal Reserve Chairman Ben Bernanke will give a downbeat outlook in his semiannual testimony to Congress on Wednesday, highlighting the need for the central bank to provide more stimulus to the economy, gave stocks a boost, causing Treasurys to give back some gains Tuesday.</br></br>The Fed has downgraded its outlook for both the economy and inflation, according to the central bank's minutes of its June policy meeting released last week. As a result, investors expect interest rates to remain at ultralow levels well into 2011 to prevent the economy from slipping back into recession.</br></br>"Bernanke is likely to give some reassurance to the markets that they are ready to provide further monetary stimulus should the economy deteriorate further, but they won't pull the trigger yet," said Kevin Walter, head of Treasury trading at BNP Paribas in New York.