Treasuries Rise as Bernanke Says Situation Unsustainable

Treasuries rose as Federal Reserve Chairman Ben S. Bernanke reiterated during his second day of testimony to Congress that the U.S. fiscal situation is “unsustainable,” supporting demand for the safest assets.

Yields on benchmark 10-year notes traded within five basis points of an all-time low as Bernanke said economic activity “decelerated” during the first half of the year, adding that the central bank is “prepared to take further action as appropriate.” The economy expanded at a “modest to moderate” pace with “tepid” job growth in June and early July, the Fed said in its Beige Book business survey. The Treasury will sell $15 billion of 10-year inflation-indexed debt tomorrow.