U.S. Treasury prices hit session lows on Wednesday after the minutes from the Federal Reserve's latest policy meeting showed the central bank was surprised at the quick progress in the labor market.
Yields on the short end of the curve were also at session highs after the announcement.
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Minutes of the Fed's July 29-30 meeting showed that some officials thought the economy was improving enough that the Fed would need "to call for a relatively prompt move" toward reducing the support it has been providing. Otherwise, they felt the Fed risked overshooting its targets for unemployment and inflation.
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In the end, the Fed made no changes at the July meeting. It approved on a 9-1 vote keeping its current stance on interest rates. But the minutes indicated rising support for a change.
"The FOMC minutes are telling us about what happened three weeks ago, and Jackson Hole, given its precedent for signaling meaningful policy shifts, has taken on this very elevated status," said Jeff Greenberg, senior economist at J.P. Morgan Private Bank.
—By Reuters with AP