TREASURIES-Yields drop after Fed's Powell says economy still needs support

 (Updates throughout, adds Powell comments, analyst reaction)
    By Ross Kerber
    Feb 23 (Reuters) - Longer-term U.S. Treasury yields fell on
Tuesday after Federal Reserve Chairman Jerome Powell said the
economy still needed central bank support.
    The benchmark 10-year yield was down a basis
point at 1.3585% in early afternoon trading. It touched a high
of 1.389% early Tuesday before Powell testified at a U.S. Senate
Banking Committee hearing in Washington.
    Powell said interest rates would remain low and the Fed's
bond purchases would continue "at least at the current pace
until we make substantial further progress towards our goals ...
which we have not really been making."
    Analysts said the market's move showed that Powell's remarks
reinforced status quo expectations, that the Fed remains dovish
despite some inflation concerns.
    "His basic stance was the same and it provided some
reassurance to the bond market," said Julia Coronado, president
of analysis firm Macropolicy Perspectives. "In Powell's
even-keeled way he said, 'Our job is far from over. We're going
to be here buying Treasuries for some time.'"
    Expectations of a consumer price uptick have significantly
boosted yields on longer-term U.S. debt since the summer.
Shortly before Powell's testimony, the 30-year bond
yield hit 2.34%, the highest since early January 2020.
    It was still up 2.2 basis points at 2.2017% early Tuesday
afternoon, reflecting investors' longer-term inflation
    The Nasdaq composite index fell more than 2% as
investors sold off mega-cap growth stocks on valuation concerns.

    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 124 basis points, about a basis point below
Monday's close.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was unchanged at
      February 23 Tuesday 12:45PM New York / 1745 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.0325       0.033     0.000
 Six-month bills               0.05         0.0507    0.003
 Two-year note                 100-5/256    0.1149    0.000
 Three-year note               99-184/256   0.2199    -0.005
 Five-year note                99-2/256     0.5793    -0.018
 Seven-year note               98-112/256   0.9837    -0.011
 10-year note                  97-212/256   1.3585    -0.010
 20-year bond                  97-120/256   2.0298    0.011
 30-year bond                  92-220/256   2.2017    0.022
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         9.25         0.25    
 U.S. 3-year dollar swap        10.75         0.00    
 U.S. 5-year dollar swap        13.25         0.25    
 U.S. 10-year dollar swap        8.00        -0.25    
 U.S. 30-year dollar swap      -24.50        -1.00    
 spread (Reporting by Ross Kerber in Boston;
Editing by Mark Heinrich and Richard Chang)