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Treasury yields retreat as Fed’s Powell stresses uncertainty and coronavirus cases surge

U.S. government debt prices were higher Tuesday morning after Federal Reserve Chairman Jerome Powell emphasized the prolonged uncertainty facing the U.S. economy, as coronavirus cases soar in numerous states.

At around 2:05 a.m. ET, the yield on the benchmark 10-year Treasury note was lower at 0.6283% and the yield on the 30-year Treasury bond was down at 1.3780%. Yields move inversely to prices.

In remarks prepared for a congressional hearing Tuesday, Powell said that despite a recent uptick in economic activity as lockdown measures are eased across the world’s largest economy, the outlook is “extraordinarily uncertain” and will rely on both containing the virus and government support for the recovery.

Powell and Treasury Secretary Steven Mnuchin will testify before the House Financial Services Committee at 12:30 p.m. ET on Tuesday.

Meanwhile, coronavirus cases continue to surge around the country, forcing states including New Jersey, Arizona and Kansas to walk back plans to further ease lockdown measures. A Reuters tally showed that California marked a record daily spike in new Covid-19 cases on Monday as Los Angeles health officials warned that hospitals could become overwhelmed.

According to data compiled by Johns Hopkins University, the U.S. has now confirmed more than 2.59 million coronavirus cases with more than 126,000 deaths, and Dr. Anne Schuchat, principal deputy director of the Centers for Disease Control and Prevention, said Monday that the virus is spreading too rapidly in the country to be brought under control.

With more than 10.3 million cases worldwide, World Health Organization’s Director-General Tedros Adhanom Ghebreyesus warned Monday that the pandemic is “not even close to being over.”

S&P/Case-Shiller home price data for April is due at 9 a.m. ET on Tuesday.

Auctions will be held Tuesday for $35 billion of 119-day Treasury bills and $35 billion of 42-day bills.

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