NEW YORK (CNN/Money) - Treasury prices turned higher Tuesday after Federal Reserve Chairman Alan Greenspan said the U.S. had been able to withstand higher energy prices, but avoided addressing the possibility of more short-term interest rate hikes.

The dollar jumped to two-month highs against the yen and euro.

The benchmark 10-year Treasury note gained 2/32 of a point to 99-22/32 to yield 4.28 percent, down from 4.30 late Monday. The 30-year note rose 5/32 of a point to 112-10/32 to yield 4.55 percent, down from 4.56 percent the previous session. Bond prices and yields move in opposite directions.

In shorter-dated debt, the two-year note fell one tick to yield 4.08 percent, and the five-year note also fell one tick to yield 4.11 percent.

Greenspan said Tuesday afternoon that greater economic flexibility had helped the U.S. withstand rising oil and gas prices but didn't make any direct comments about the Fed's measured pace of interest rate hikes.

"I don't see anything in the speech that is relevant to the near-term outlook," Cary Leahey, senior managing director at Decision Economics, told Reuters.

Inflation, which hurts bonds because it erodes the value of the fixed-interest paying investments, turned higher following the remarks made at 2:45 p.m. ET.

Earlier Tuesday, government-backed debt had traded lower as investors shrugged off a set of disappointing economic reports.

The Conference Board, a private business group, said its consumer confidence index took its biggest plunge in nearly 15 years, dropping to 86.6 in September. The number was near a two-year low and well below economists' expectations for a drop to 95, down from a 105.6 reading in August.

Separately, the Commerce Department said new single-family home sales fell to a seasonally adjusted annual rate of 1.24 million units, the slowest pace since January, from a downwardly revised 1.37 million units in July.

In currency trading, hawkish comments from Fed policy makers about inflation pressures pushed the dollar to two-month highs against the euro and yen.

Rising interest rates generally help the dollar as they make dollar-denominated securities more attractive to foreign investors.

The euro traded at $1.2009, down from $1.2072 late Monday, while the dollar rose to ¥113.30 from ¥112.20 late Monday.

-- from staff and wire reports

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