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U.S. Treasury prices rallied Thursday as worries about a choppy economic recovery and reports that a Malaysia Airlines passenger jet crashed led investors to safer assets, dragging the 10-year yield back below 2.5%. In midday trading, benchmark 10-year notes gained 15/32 in price to yield 2.482%, according to Tradeweb. The 30-year bond advanced 1 1/32 to yield 3.295%, the lowest since late May. Bond yields fall when prices rise.

Traders say the latest round of Treasurys-buying was fueled by news of a Malaysia Airlines flight crashing near the Russia-Ukraine border near Donetsk. Malaysia Airlines said it lost contact with flight MH17 over the Ukrainian airspace.

Tensions were already high in the region as Russia maintains a military presence along its Ukrainian border. Just Wednesday, the U.S. and European Union imposed a new round of sanctions against Russian companies and individuals as a consequence of the Ukrainian conflict.

Fears that the crash could further escalate the friction spurred a broad rally in safer assets, lifting Treasurys, gold prices and the Japanese yen.

For bonds, the gains add to earlier advances on the back of a disappointing U.S. housing report.

The Commerce Department reported the number of homes breaking ground in the U.S. dropping 9.3% in June, falling well short of economist expectations.

“To date, data remains choppy, providing little convincing evidence of a sustainable or strong economic recovery,” said Sean Simko, fixed-income portfolio manager at SEI Investments. “When you add the geopolitical uncertainty, you have added fuel propelling the market higher.”

The uneven recovery in the U.S. housing market is a factor that could keep the Federal Reserve inclined to maintain an accommodative policy. Fed Chairwoman Janet Yellen has said the housing market is an area of the economy the central bank continues to keep a close eye on, even with the labor market having shown some encouraging signs lately.

Worries at home and abroad have kept Treasury yields pinned down in a year when many investors expected rates would persistently rise. The 10-year yield is back below 2.5%, from 3% at the start of the year, although many analysts still forecast the yield to end the year above 3%.

Tom di Galoma, head of fixed income rates at ED&F Man Capital Markets, says he wouldn’t be surprised if the yield tests 2.4% given Ms. Yellen’s testimony on Tuesday and Wednesday.

In remarks before Congress, the Fed chief acknowledged improvements in the economy but suggested the central bank needs to see more sustained growth before tightening policy.

Since the comments, longer-dated Treasurys have outperformed the rest of the market, leading a narrower yield difference between near- and far-dated maturities. The yield gap between five- and 10-year notes, for instance, shrank to 0.83 percentage point-its lowest since June 2012. A flatter yield curve often signals concerns about the economic outlook.