NEW YORK: US Treasuries prices rose on Wednesday as the minutes from Federal Reserve's April policy meeting reinforced the view the central bank will likely leave interest rates near zero in June due to lingering concerns about the US economy.
Longer-dated bonds erased earlier losses that had been caused by worries that the Fed was possibly more determined to raise interest rates in June than previously thought.
"Many participants, however, thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising (interest rates) had been satisfied," the minutes of the Federal Open Market Committee's April 28-29 meeting showed.
Worries about an imminent rate increase had emerged even though a spate of US data signaled a meek rebound following a likely economic contraction in the first quarter.
Although a June rate hike now seems unlikely, the minutes did not dispel expectations for such a move later this year, capping the rise in Treasuries prices.
Most top Wall Street firms forecast the Fed to begin raising rates by December.
"They reserved the right to stand pat in the second quarter until they see further development," said Mike Lorizio, head of Treasuries trading at John Hancock Asset Management in Boston.
Treasuries prices also improved due to a tapering in corporate bond supply. Companies had raised $38 billion in the bond market on Monday and Tuesday, according to IFR, a Thomson Reuters unit.
On light trading volume, benchmark 10-year Treasuries were up 3/32 in price with a yield of 2.251 percent, down 1 basis point from late on Tuesday.
The 30-year bond was down 8/32 in price after falling almost 1 point earlier. The 30-year yield was last 3.052 percent, up 1 basis point on the day but still below the 5-1/2 month peak of 3.128 percent seen last week.
Prices of US government debt, which fell during the past two sessions, had risen earlier on Wednesday in step with the European bond market, spurred by the European Central Bank's plan to accelerate its bond purchases in May and June, traders said.
Concerns about Greece's ability to make a June 5 debt payment to the International Monetary Fund had briefly renewed safe-haven demand for Treasuries.
Traders also pinned hopes for a further fall in yields from month-end portfolio buying tied to an expected adjustment of a widely-followed Treasuries market index that includes more longer-dated issues.
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