Treasury yields drop

Prices on US Treasury bonds were higher on Friday as investors looked to government bonds for a safe place to put their money as they worried about problems in the subprime mortgage sector spreading to other sectors of the economy.

There were warnings from JP Morgan (NYSE: JPM; TYO:8634) and Fed chairman Ben Bernanke this week about the subprime mess, while Standard and Poor’s issued downgrades on some European collateralized debt obligations on Friday.

In addition, China announced overnight that it is raising interest rates there in another attempt to slow down growth in their economy.

Yields on two-year Treasury bonds were down to 4.775 percent, while the ten-year bond was yielding 4.958 percent and had gone as low as 4.931 percent during the day.

Thirty-year paper, meanwhile, yielded 5.064 percent.

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