Investors stick with Treasuries after Bernanke

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NEW YORK (CNNMoney) -- Investors stuck with U.S. Treasuries Friday as they sought safety after Federal Reserve Chairman Ben Bernanke failed to announce any new stimulus measure to jumpstart the economy...at least for now.

During the highly anticipated speech at the Kansas City Fed's annual retreat in Jackson Hole, Wyo., the Fed chief said the central bank will do "all that it can" to support the fragile recovery.

He extended the Fed's one-day meeting meeting in September to two days "to allow a fuller discussion" of what the central bank should do to respond to "disappointing" economic growth.

But Bernanke also noted the limits of Fed power, and called on gridlocked Congress to make decisions on taxes and spending sooner rather than later to help ensure a healthy economic future for the United States.

Bernanke pledges Fed support, but notes limits

While the Fed left the door open to additional stimulus down the line, investors were hoping for a repeat of Bernanke's speech at Jackson Hole last year, when he warmed investors to the idea QE2.

"There were some bets that the Fed would allude to some imminent action, but clearly that did not come to pass," said Richard Bryant, head of Treasury trading at MF Global. "Even though the Fed reminded us that it has policy tools at its disposal, investors were hoping that it would take those tools out of the toolbox sooner rather than later."

As investors purchased U.S. debt for its safe haven appeal, the yield on the 10-year Treasury fell to 2.19% from 2.22% late Thursday.

While Friday's post-Bernanke move is minor, yields have been on the decline for weeks, as investors grow nervous about the strength of the U.S. economy. Just a month ago, the 10-year yield stood around 3%. Last week, the yield dropped below 2% for the first time in history.

As investors continue to wait on the Fed to provide more clarity, Bryant expects yields to maintain these low levels.

"In times of uncertainty like this, capital tends to move into the Treasury market," he said. "Even though yields are already so low, Treasuries will still attract investors given the unstable backdrop."

Investors picked up more Treasuries after the government's reading on second-quarter economic growth was revised to 1%, down from a previous reading of 1.3%.