Short-term Treasury rates fell from multiyear highs on Thursday after European Central Bank President Mario Draghi criticized plans by certain member countries to increase borrowing limits, sending Italian and Spanish yields up sharply.
Relatively safer bonds, such as German bunds and U.S. Treasurys, caught a safety bid as equities in Europe and on Wall Street extended losses. U.S. yields initially rose Thursday after the Federal Reserve's latest meeting minutes showed members were confident in the current path of interest rate hikes and wary of frothiness in financial markets.
The U.S. two-year Treasury yield hit a high of 2.907 percent, its highest level since June 25, 2008, before falling to 2.878 percent.
Minutes of the Fed's meeting released Wednesday showed officials talking over plans for more rate hikes, with some saying there could be a time when the central bank should exceed a neutral level in favor of more restrictive policy. Restrictive interest rates would likely be used to clamp down on inflation overshooting the Fed's target and to address "the risk posed by significant financial imbalances."
The yield on the benchmark 10-year Treasury note was higher at around 3.18 percent, about 3 basis points below highs not seen since 2011. The yield on the 30-year Treasury bond bond was higher at 3.369 percent. Bond yields move inversely to prices.