In a question and answer session with lawmakers, Greenspan kept to his cautiously upbeat tone from last week, noting that it was possible for US job markets to become too tight but that, in his opinion, the unemployment rate - which currently stands at 4 per cent - had not reached that point.

The Fed chief reiterated that supply and demand elements in the world's largest economy had moved closer to equilibrium in the past two or three months. But market participants said the fact he revealed nothing new left prices barely changed to slightly higher than Monday's close.

"We're really back to levels we were at yesterday when we went home," said Thomas Connor, head of governments trading at JP Morgan Securities, who described Greenspan's testimony as a "non-event."

At the 3 PM EDT (1900 GMT) settlement, 10-year notes were unchanged at 103-12/32. Their yield, which moves inversely to the price, held at 6.03 percent. 30-year bonds edged up 4/32 to 106-8/32, yielding 5.81 percent.

Two-year notes meanwhile were 2/32 higher at 100-2/32, yielding 6.34 percent, while five-year notes were up 2/32 at 102-14/32, to yield 6.16 percent.

The Fed chief - whose prepared remarks to the House Banking Committee did not stray far from his testimony before a Senate panel last Thursday - said the central bank did not believe rising wages would generate inflation unless they outstripped gains in productivity.

Greenspan also said that part of the Fed's 1.75 percentage points of credit tightening since June 1999 had not yet affected the overall economy, but more data should be available by August 22, when the Fed next meets to set monetary policy.

Jan Hatzius, economist at Goldman Sachs, said "The Q&A was again constructive and leaves the door open for a hike in August. But if the meeting were today, there would be no hike."

Earlier, prices shrugged off data showing a rebound in US consumer confidence in July. The Conference Board said its Consumer Confidence index rose to 141.7 this month from a revised 139.2 reading in June.

Economists polled by Reuters had expected the index to rise only slightly to 139.3 from an earlier reported level of 138.8 in June. Relatively high levels of confidence could underpin consumer spending, undermining hopes that interest rates would plateau at current levels, strategists said.

-- (Reuters)