NEW YORK, May 22 (Reuters) - Prices of U.S. 30-year Treasury bonds turned lower on Wednesday, erasing earlier gains, after Federal Reserve Chairman Ben Bernanke raised the possibility of reducing the Fed's bond purchases this year if economic growth improves further.
"If we see continued improvement and we have confidence that that's going to be sustained, then we could in the next few meetings, we could take a step down in our pace of purchases," Bernanke said during the question-and-answer portion of his testimony before the U.S. Joint Economic Committee.
In prepared remarks earlier for the congressional panel, Bernanke spoke of the benefits resulting from the Fed's protracted purchases of Treasuries and mortgage-backed securities and cautioned against a premature tapering of this move until the labor market shows significant improvement.
The 30-year bond last traded down 29/32 in price at 94-2/32, yielding 3.18 percent, up 5 basis points from late on Tuesday.
