US Treasury yields rise ahead of Fed minutes and 20-year debt auction

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By Karen Brettell

NEW YORK, Aug 18 (Reuters) – U.S. Treasury yields rose on Wednesday ahead of the release of minutes from the Federal Reserve’s July meeting, which could indicate a date when the central bank you would start reducing your bond purchases.

* Fed Chairman Jerome Powell has said he wants to see a further improvement in employment before tightening policy, even as other Fed members are concerned that the recent acceleration in inflation may be more than transitory.

* “The key thing we will be looking at is any updated timeline regarding the outlook for phasing out,” said Zachary Griffiths, a strategist at Wells Fargo. He added that until December the Fed is unlikely to announce a policy change.

* “The other thing we’re looking at is the Fed’s assessment of inflation (…), any indication that committee members are feeling uncomfortable and perhaps wavering on the transitory narrative that we think will be taken very aggressive, “Griffiths added.

* Data released Wednesday showed that US home construction fell more than expected in July, a sign that construction costs and home prices continued to constrain the housing market in the early third quarter.

* The return of the 10-year bond gained 1 basis point at 1.27%. The yield curve between 2- and 10-year notes steepened 1 basis point to 106 points.

* Investors will see if the Fed expresses concern about new variants of COVID-19, including Delta. Powell will also speak at the Fed’s annual economic symposium next week in Jackson Hole, Wyoming.

* The Treasury will sell $ 27 billion in 20-year bonds later on Wednesday.

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