TREASURIES-Bond sell-off steepens after Bernanke GSE remarks

NEW YORK, July 11 (Reuters) - Treasury debt prices steepened their fall on Friday after a source familiar with a conversation between Federal Reserve Chairman Ben Bernanke and Freddie Mac chief Richard Syron said Bernanke told Syron his company and Fannie Mae could take advantage of the emergency discount window.

The discount window is a provision that allows some U.S. financial institutions to borrow directly from the Federal Reserve.

Reports of the remarks reversed sharp losses in the stock market and detracted from U.S. government debt's safe-haven appeal as a refuge from riskier assets.

The benchmark 10-year Treasury note's US10YT=RR price, which moves inversely to its yield, skidded 1-5/32 for a yield of 3.94 percent, versus 3.80 percent late Thursday. (Reporting by John Parry; Editing by Dan Grebler)