Dovish Federal Reserve minutes released on Wednesday, which reiterated that the U.S. central bank was in no rush to raise interest rates, also weighed on Treasury yields.

Thursday's higher-than-expected U.S. jobless claims further pushed yields lower. Initial claims for state unemployment benefits totaled a seasonally-adjusted 744,000 for the week ended April 3, compared with 728,000 in the prior week.

Continued unemployment claims though fell to 3.73 million for the week of March 27.

"Falling incidence of the coronavirus will lower initial claims," said Stan Shipley, fixed income strategist, at Evecore ISI in New York. He added that overall the data showed the "labor market is continuing to heal and should be neutral for Treasury yields."

But with a massive $370 billion in Treasury supply looming over the next few weeks, analysts said it's only a matter of time before yields start shooting higher again.

Supply starts next week with the auction of 3-year, 10-year-and 30-year debt.

"Back-to-back supply for the next three weeks with no break, and I would think rates have to move higher by next week from today's levels," said Tom di Galoma, managing director at Seaport Global Holdings. "In my view, 10-year yields could easily trade back to 1.75pc next week."

Concerns about supply have steepened the yield curve for the last three sessions, but it flattened a bit on Thursday.

The spread between 5-year notes and 30-year bonds narrowed to 147.60 basis points.

In midmorning trading, the U.S. 10-year Treasury yield was down at 1.64pc from 1.654pc on Wednesday.

U.S. 30-year yields fell to 2.325pc from Wednesday's 2.336pc.

U.S. 5-year note yields, which typically reflect interest rate expectations, dropped for a fourth straight session to 0.849pc from Wednesday's 0.858pc.

Recent declines in the 5-year yield suggested that investors do not believe the Fed will raise rates earlier than expected.

At the March meeting, the Fed said it did not expect to raise interest rates until 2024.

Despite the Fed's dovish comments in the policy meeting minutes, the eurodollar futures market, which tracks interest rate expectations, still has fully priced in a Fed hike by March 2023.

In the aftermath of the strong U.S. non-farm payrolls report last Friday, eurodollar futures show a 100pc chance of rate increases by December 2022.

Yields on the front end to the so-called belly of the curve were down, while those on the very long end were firmer. U.S. 10-year yields, however, dropped to a two-week low.

"The conviction for today is more limited and more akin to a period of consolidation around the current levels and trading volumes are muted," said Ben Jeffery, rates strategist, at BMO Capital Markets in New York.

In mid-morning trading, the U.S. 10-year Treasury yield was little changed at 1.656pc, from 1.657pc on Tuesday.

U.S. 30-year yields were up a bit at 2.33pc, from Tuesday's 2.316pc.

U.S. 5-year note yields continued their descent, at 0.857pc, from Wednesday's 0.872pc.

Movements in 5-year notes reflect interest rate expectations, analysts said. Recent declines in the 5-year yield suggested that investors are not really buying aggressive pricing in the futures market of the first hike from the Federal Reserve.

On the short end of the curve, U.S. 2-year yields slipped to 0.154pc, from 0.161pc on Monday.

For a third straight session, the yield curve flattened on Wednesday, with the spread between U.S. 2-year and 10-year yields slid to 150.10 basis points.

The Fed is also scheduled to release later on Wednesday the minutes of its last policy meeting in March, though analysts do not expect them to have a major impact on the market.

"I don't think we'll see much change in the Fed's tone. They will probably still sound dovish," said Gennadiy Goldberg, senior rates strategist, at TD Securities.

"One thing I will be looking at would be clarification on what constitutes 'sufficient further progress' as stated by the Fed."

At the March meeting, the Fed projected that the U.S. economy will grow at 6.5pc clip this year, benefitting from the massive fiscal stimulus and expected success of the COVID vaccines.

Euro dollar futures, which track interest rate expectations, have come off a bit in terms of pricing the first Fed rate hike.

On Wednesday, the futures market has priced a full Fed tightening in March 2023, after showing a full hike by December 2022 the last few days.

Traders must rebalance their portfolios at the end of the month and quarter to account for the drop in maturity of a bond portfolio as time passes. In order to rebalance, traders buy longer-dated debt, which typically drives yields lower.

Demand was evident at the long end of the curve with the 10-year yield last down 1.4 basis points at 1.710% after rising to a 14-month high on Tuesday.

The 30-year bond yield was down 2.5 basis points at 2.370%.

The move lower in yields on longer-dated debt flattened the yield curve.

The flattening began late on Tuesday after the spread between two- and 10-year yields - the most commonly used measure of the yield curve - had earlier reached its widest since July 2015.

The two- and 10-yield curve on Wednesday was down less than a basis point on the day, while the spread between the five- and 30-year yields was down 1.5 basis points on the day.

There is "a little bit of a bid in the long end as we look towards extensions and rebalancing. Overall it has been a fairly quiet day. Even this stronger data has had a minimal impact," said Justin Lederer, Treasury analyst and trader at Cantor Fitzgerald.

"There are a lot of people looking over to finish the quarter," said Lederer.

Yields were little moved by reports earlier that U.S. private employers hired the most workers in six months in March as more Americans got vaccinated against COVID-19, pushing the economy toward a broader reopening.

The dip in yields comes ahead of Biden's infrastructure announcement later Wednesday in Pittsburgh.

The plan could have a price tag as high as $4 trillion to pay for traditional roads and bridges while also addressing climate change and income equality.

Such a plan would require an increase in debt issuance that would drive Treasury prices lower and yields higher.

Wednesday's dip in yields may therefore be a temporary move ahead of the announcement.

"The Biden thing is definitely important. I do believe that we could continue to see higher rates," said Lederer.

"If the economy continues to show that it is gaining momentum, and inflation picks up, with all this money in the system, I think that higher rates is where we should be going."