Treasuries Finish Choppy Trading Day Roughly Flat

(RTTNews) - After recovering from an early move to the downside, treasuries showed a lack of direction over the course of the trading session on Wednesday.

Bond prices spent much of the day bouncing back and forth across the unchanged before closing roughly flat. The yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point at 4.535 percent.

The choppy trading seen for much of the day came as traders looked ahead to the release of the minutes of the latest Federal Reserve meeting relatively late in the session.

The minutes revealed Fed officials want to see further progress on inflation before they consider resuming lowering interest rates.

The minutes of the Fed's January 28-29 meeting also reiterated officials believe a "careful approach" in considering additional adjustments to the stance of monetary policy is appropriate given the high degree of uncertainty.

Factors mentioned by participants as supporting a "careful approach" included the reduced downside risks to the outlook for the labor market and economic activity and increased upside risks to the outlook for inflation, the Fed said.

Participants said the upside risks to the inflation outlook partly reflected the possible effects of potential changes in trade and immigration policy.

While many participants noted the Fed could keep rates at a restrictive level if the economy remained strong and inflation remained elevated, several remarked that policy could be eased if labor market conditions deteriorated, economic activity faltered or inflation returned to 2 percent more quickly than anticipated.

The minutes also said participants observed that the Fed was well positioned to take time to assess the evolving outlook for economic activity, the labor market, and inflation, with the vast majority pointing to a still-restrictive policy stance.

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims, Philadelphia-area manufacturing activity and leading economic indicators.