U.S. Treasurys prices fell on Thursday after the government had to pay more to sell $7 billion in new 30-year Treasuries Inflation-Protected Securities (TIPS).
Prices also dropped as investors reworked positions, a day after the Federal Reserve struck a more dovish tone than expected at its June meeting.
The TIPS were sold at a high yield of 1.116 percent, around 3 basis points higher than where the debt traded before the sale. "It was much weaker than we thought," said Rick Klingman, a Treasuries trader at Societe Generale in New York.
The weakness came after bonds rallied on Thursday morning as investors covered bearish Treasurys positions made on expectations that the Fed would take a more hawkish tone on Wednesday.
Stronger-than-expected consumer price data on Tuesday had led some investors to expect the Fed would hint towards interest rate hikes sooner than had been previously expected.