Aug. 20, 2011 (Bloomberg) -- Treasuries surged, pushing yields on five-, seven- and 10-year notes to historic lows, as investors sought a refuge on concern U.S. growth is slowing and Europe’s sovereign-debt crisis is getting worse.
Yields on 30-year bonds dropped this week the most since 2008 after the Federal Reserve said earlier in August it would keep borrowing costs unchanged until at least mid-2013 and Standard & Poor’s lowered the top U.S. credit rating. The rally in bonds indicates Fed Chairman Ben S. Bernanke may signal at a conference on Aug. 26 in Jackson Hole, Wyoming, that additional measures to lift the economy are needed.
“Clearly growth continues to be extremely weak,” said Larry Milstein, managing director of government and agency debt trading in New York at R.W. Pressprich & Co., a fixed-income broker and dealer for institutional investors. “There’s still concern for what’s going on in Europe. Despite the downgrade by S&P, investors are looking for safety, and that’s clearly in the Treasury market.”