2018.05.2320:39:00UTC+00US 10-Year Yield Drops Below 3% After Fed Minutes

U.S. government debt yields dropped on Wednesday after the Federal Reserve's latest meeting minutes revealed that the central bank would be open to letting inflation temporarily run a bit above its 2 percent target.

The yield on the benchmark 10-year Treasury note, which moves inversely to price, dropped roughly 7 basis points to 2.995 percent, while the yield on the 30-year Treasury bond lost 6 basis points to 3.154 percent.

Following the May meeting, the policymaking arm of the Fed said it wasn't hiking rates yet but added the word "symmetric" to describe its inflation goal. Though the general tone was that inflation would continue to rise, there was disagreement over how confident the Fed should be after undershooting its 2 percent target for so long.

The Treasury Department auctioned $36 billion in five-year notes at a high yield of 2.864 percent. The bid-to-cover ratio, an indicator of demand, was 2.52. Indirect bidders, which include major central banks, were awarded 56.2 percent. Direct bidders, which includes domestic money managers, bought 10.9 percent.