NEW YORK: US Treasury yields were little changed on Wednesday with benchmark yields hovering at one-week highs in advance of the release of the Federal Reserve's minutes of its July 25-26 policy meeting.
Traders and investors are awaiting signs from the policy-makers on whether the US central bank would announce its plan to begin reducing its $4.2 trillion worth of Treasuries and mortgage-backed securities on its balance sheet at its Sept. 19-20 meeting, analysts said.
They are also looking for clues on Fed officials' view on inflation, which has softened since March, and whether they are confident it would move back toward its 2-percent goal.
"The market wants a confirmation about its balance sheet plan and inflation view," said Gene Tannuzzo, senior portfolio manager at Columbia Threadneedle Investments in Minneapolis.
If Fed officials were to show less confidence on inflation, this may diminish traders' view that they would raise short-term rates at its December meeting.
"Would they go back to 'transitory' on describing inflation or they will go full steam ahead" with another rate hike, Tannuzzo said.
The Fed was scheduled to released its July minutes at 2 p.m. (1800 GMT).
At 11 a.m. (1500 GMT), the benchmark 10-year Treasury yield was 2.261 percent, down half a basis point from late Tuesday, while the 30-year yield was 2.832 percent, down nearly 1 basis point from Tuesday's close, Reuters data showed.
Treasury yields reached one-week peaks earlier Wednesday in line with their European counterparts on stronger-than-forecast annual growth in the eurozone. They have risen this week as investors reduced their safe-haven bond holdings due to easing tensions between United States and North Korea.
Bond yields began receding following a Reuters report that European Central Bank President Mario Draghi will not deliver a new policy message at the Fed's Jackson Hole conference later this month.
Traders had speculated Draghi might float the notion the ECB would reduce its bond purchases later this year as the region's economy has improved.
"I think this is mildly bullish (for bonds), but I'm not sure it changes much as far as guidance on tapering from Draghi," said Aaron Kohli, interest rates strategist at BMO Capital Markets in New York.
US yields retreated further after data showed domestic home construction unexpectedly fell 4.8 percent in July, raising doubts about the housing strength in the third quarter.
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