U.S. Treasury yields advanced on Wednesday after meeting minutes from the Federal Reserve showed caution around lowering interest rates too quickly.
The yield on the 10-year Treasury was up by nearly 5 basis points at 4.323%. The 2-year Treasury yield was last higher by about 5 basis points to 4.664%.
Yields and prices move inversely. One basis point equals 0.01%.
Treasurys
The meeting minutes released Wednesday afternoon indicated they were in no hurry to lower the cost of borrowing. Fed officials said they want to see more before starting to ease policy, but also said rate hikes were likely finished.
"In discussing the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle," the minutes stated. But, "Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent."
Prior to the January meeting, traders had been pricing in a high chance of rate cuts beginning as early as March. In a post-meeting press conference, however, Fed Chairman Jerome Powell said this was unlikely, dampening hopes from investors. Expectations have since moved to a June rate cut.
Economic data released last week also dashed hopes that rate cuts will begin sooner rather than later, especially as Fed officials have indicated that their decision-making will be data-led.
Both the consumer price index and producer price index came in hotter than expected for January, which suggested to many investors that inflation is more persistent than they had hoped.