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US Treasury yields trade mostly higher as investors digest Fed minutes

  • The Treasury Department auctioned $24 billion in 3-year notes Wednesday morning. The 10-year Treasury auction is set for 1 p.m. ET.
  • The Treasury Department also auctioned $20 billion in 10-year notes at a high yield of 2.346 percent.

U.S. government debt yields traded mostly higher Wednesday, as investors digested the latest minutes from the Federal Open Market Committee (FOMC) meeting and digested two Treasury auctions.

The yield on the benchmark 10-year Treasury note sat around the flatline at around 2.343 percent at 2:06 p.m. ET, while the yield on the 30-year Treasury bond fell slightly to 2.874 percent. Bond yields move inversely to prices.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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Federal Reserve officials see the economy expanding at a steady clip and an interest rate hike later this year a near lock, despite some divisions over where inflation is headed.

Minutes from the September meeting of the policymaking Federal Open Market Committee show members anticipating that the factors slowing down inflation will pass. The expectation is that will lead to the number hitting the 2 percent target the central bank believes is consistent with healthy growth.

The Fed announced that it would begin to roll off its $4.5 trillion balance sheet during the month of October last month in addition to indicating that another rate hike was likely to occur in 2017.

Investors will pore over the minutes Wednesday for any signs as to what the Federal Reserve may do in the coming months, and what it currently thinks of the U.S. economy.

The Treasury Department auctioned $24 billion in 3-year notes at a high yield of 1.657 percent, the highest yield at a 3-year Treasury note auction since April 2010. The bid-to-cover ratio, an indicator of demand, was 2.83.

Indirect bidders, which include major central banks, were awarded 54.3 percent. Direct bidders, which includes domestic money managers, bought 7.1 percent.

The Treasury Department also auctioned $20 billion in 10-year notes at a high yield of 2.346 percent. The bid-to-cover ratio, an indicator of demand, was 2.54.

Indirect bidders, which include major central banks, were awarded 69.1 percent. Direct bidders, which includes domestic money managers, bought 6 percent.

Total mortgage application volume fell 2.1 percent last week, according to the Mortgage Bankers Association's seasonally adjusted report. While most of the drop stemmed from a continued reduction in refinance activity, applications to purchase a home also fell.

U.S. employers are still advertising near-record levels of job openings, though the total slipped in August from July.

Job openings fell 0.9 percent in August to just under 6.1 million, the Labor Department said Wednesday, from 6.14 million in the previous month. July's figure was revised slightly lower but is still the largest number of available jobs since records began in December 2000.

Investors will also be ka close eye on geopolitics, in particular developments surrounding the U.S.' tense relationship with North Korea.

On Tuesday, the U.S. military flew two strategic bombers over the Korean peninsula, as U.S. President Donald Trump met with defense officials to look into how to deal with any threats posed by Kim Jong Un's regime, according to Reuters.

—CNBC's Jeff Cox contributed to this report.