The minutes offer Wall Street an idea of how the central bank is thinking about the strength of the economy, with many expecting that the Federal Open Market Committee will raise rates in June to stay ahead of creeping inflation.
Minutes from their previous meeting showed that "all participants" expected both the economy to strengthen and inflation to rise "in coming months," citing strong spending patterns and a consistently tight labor market.
Consumer prices as measured by the personal consumption expenditures price index — the Fed's preferred inflation gauge — jumped 2 percent year-on-year in March, the biggest gain since February 2017.
The rising prices appear to be rising in part thanks to a competitive labor market, with the Labor Department reporting that the unemployment rate fell to 3.9 percent in April, the lowest level since December 2000.
Tighter labor markets are usually considered a bellwether of labor input wages in classical economics: When workers are in higher demand, employers will typically have to pay more for their services. Wages, in turn, are often seen as a prelude to higher prices throughout the economy as people spend more as their paychecks grow.
Rising inflation, which threatens Treasury prices because it erodes the purchasing power of their fixed payments, puts upward pressure on rates.
The Treasury Department auctioned $33 billion in two-year notes at a high yield of 2.59 percent, the highest yield at auction since July 2008. The bid-to-cover ratio, an indicator of demand, was 2.88. Indirect bidders, which include major central banks, were awarded 39.3 percent, the smallest share since December 2016 per Reuters data. Direct bidders, which includes domestic money managers, bought 15.3 percent.