TREASURIES-Rise as Bernanke hints at targeting long rates

(Updates comment, prices after Bernanke remarks)

By Ellen Freilich

NEW YORK, Dec 1 (Reuters) - U.S. Treasuries prices rose sharply on Monday, pushing long-term yields to their lowest in more than five decades, after Federal Reserve Chairman Ben Bernanke said more interest rate cuts were possible and hinted that the Fed could use other methods to aid growth.

Bernanke said cuts beneath the Fed's current target of 1 percent for its benchmark overnight funds rate were "certainly feasible", and suggested that the Fed would also use other unconventional measures to aid growth.

Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co in New York, said Bernanke's mention of the strategy of targeting long-term rates "pushed the yield on 10-year Treasuries down an additional (18 basis points) on the day."

Benchmark 10-year Treasury notes US10YT=RR, which were up 24/32 before Bernanke spoke, nearly tripled their gains by the time Bernanke finished delivering his prepared remarks.

Ten-year Treasury yields, which move inversely to price, fell to 2.67 percent, the lowest in at least five decades, from 2.85 percent earlier and from 2.92 percent late on Friday.

In addition, a House Democratic aide said that Democrats in the U.S. House of Representatives likely will seek passage next month of an economic stimulus bill costing about $500 billion, a smaller package than some economists have recommended.

Earlier on Monday, House Speaker Nancy Pelosi told reporters she hoped Congress would have an economic stimulus bill ready for President-elect Barack Obama to sign when he takes office on Jan. 20. She did not provide details. (Additional reporting by John Parry; Editing by James Dalgleish)