Treasuries

Treasuries rose, pushing two-year yields to the lowest level since April 2004, as mounting losses in credit markets and the slowing U.S. economy drove investors to the safety of government debt. More than $181 billion in losses linked to subprime mortgage loans have made banks around the world less willing to lend to companies and individuals. The losses, triggered by the worst housing recession in a quarter-century, have prompted the Fed to cut rates to 3 percent from 5.25 percent since September.

Fed Chairman Ben S. Bernanke told the Senate Banking Committee yesterday it's ``fair'' to say the Fed has a tougher time responding to the current slowdown compared with the recession of 2001. He said some small banks exposed to real estate may fail, fueling bets policy makers will increase the pace of interest-rate cuts.