Treasuries Close Firmly Positive Following Fed Minutes

(RTTNews) - After coming under pressure in early trading, treasuries showed a significant turnaround over the course of the trading day on Wednesday.

Bond prices saw further upside following the release of the minutes of the latest Federal Reserve meeting, closing firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6.7 basis points to 2.129 percent.

With the decrease on the day, the ten-year yield ended the session at its lowest closing level in well over two months.

The higher close by treasuries came after the Fed released the minutes of the monetary policy meeting the central bank held last month.

The minutes, which were released ahead of schedule, revealed most participants believed conditions for raising interest rates were approaching but not yet achieved.

While meeting participants said labor market had improved notably since early this year, many saw scope for some further improvement.

Some participants also expressed concerns about the outlook for inflation and whether it would support an interest rate hike.

The minutes led to some speculation that the Fed may delay its first rate hike rather than raising rates in September, as many previously anticipated.

Earlier in the day, the Labor Department released a report showing that U.S. consumer prices rose by slightly less than expected in July.

The Labor Department said its consumer price index edged up by 0.1 percent in July after climbing by 0.3 percent in June. Economists had expected prices to rise by 0.2 percent.

Excluding food and energy prices, the core consumer price index also ticked up by 0.1 percent in July following a 0.2 percent increase in June. Core prices were also expected to rise by 0.2 percent.

Trading on Thursday may be impacted by reaction to a slew of U.S. economic data, including reports on weekly jobless claims, existing home sales, and Philadelphia-area manufacturing activity.