U.S. Treasuries eased on Thursday as investors booked some profits on a week of gains, but the market remained solidly underpinned by fears that more bad news on housing was just around the corner.
Anxiety over troubled mortgage investments has kept bonds afloat in recent sessions, briefly pushing benchmark yields back below 5 percent.
Federal Reserve Chairman Ben Bernanke reinforced the rally on Wednesday by zeroing in on subprime or high-risk home loans in his congressional testimony. Downbeat housing data and relatively tame inflation figures have also supported bonds.
While Bernanke officially lowered the Fed's forecasts for U.S. economic growth, the outlook was not seen as sufficiently glum to warrant near-term interest rate cuts.
This left the bond market stuck in a range, with 10-year notes down 3/32 in price and offering a yield of 5.05 percent. That was up a basis point from Wednesday's close but still down five basis points on the week.
The key data and event hurdles have been seen and provide not enough new information to propel the market through the highs, said David Ader, government bond strategist at RBS Greenwich.
Now, traders turn again to Congress as Bernanke takes his turn before the Senate at 9:30 a.m. (1330 GMT) More questions on housing are likely to arise, leaving the Fed chief room to either redouble the warnings offered before the House of Representatives on Wednesday, or temper them somewhat.
On the data front, analysts would pay some attention to weekly jobless claims, due out shortly. But the Philadelphia Fed's index of Mid-Atlantic factories might prove more relevant as traders look for confirmation that a steady climb in a New York manufacturing activity is more than a local trend.
Underneath it all, any evidence of further financial pain emanating from housing and related assets -- from hedge fund blow ups to credit spread blow outs -- could keep Treasuries riding high.