By Sunny Oh

Treasury yields struggled for direction on Wednesday as investors looked to glean clues on the Federal Reserve's policy stance from the minutes of its most recent meeting.

What are Treasurys doing?

The 10-year Treasury note yield was mostly unchanged at 2.423%. The 30-year bond yield was also virtually flat at 2.844%, while the 2-year note yield fell 1.3 basis points to 2.245%.

What's driving Treasurys?

Investors are bracing for the minutes from the April 30-May 1 meeting of the Federal Open Market Committee, the U.S. central bank's rate-setting group. In particular, market participants hope to see more clarity on how the recent softness in inflation could influence the outlook for easier monetary policy, with a large cross-section of the bond-market still expecting one to two rate cuts by the end of this year.

See: (http://www.marketwatch.com/story/whats-next-for-the-fed-wall-street-to-sift-for-clues-in-recap-of-last-fomc-get-together-2019-05-21)What's next for the Fed? Wall Street to sift for clues in recap of last FOMC get-togethe (http://www.marketwatch.com/story/whats-next-for-the-fed-wall-street-to-sift-for-clues-in-recap-of-last-fomc-get-together-2019-05-21)r (http://www.marketwatch.com/story/whats-next-for-the-fed-wall-street-to-sift-for-clues-in-recap-of-last-fomc-get-together-2019-05-21)

Fed fund futures indicate traders see a 68% chance of the central bank easing policy, CME Group data show (https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html).

St. Louis Fed President James Bullard said (http://www.marketwatch.com/story/interest-rate-cut-may-be-needed-if-inflation-target-eludes-feds-bullard-2019-05-22) on Tuesday the central bank could cut its short-term interest rate to help achieve the Fed's 2% inflation target.

Other central bankers are on the docket, too. New York Fed President John Williams will speak at 10 a.m. Eastern time, followed by Atlanta Fed President Raphael Bostic at 10:10 a.m.

What did market participants say?

"The FOMC Statement on May 1 offered no clues on near term leanings and did little or nothing to challenge market speculation on cuts. Chairman Powell's press conference highlighted belief that recent inflation softness was transitory, rather than permanent, a view that prompted markets to rein in speculation for near term cuts," said Stephen Gallagher, chief U.S. economist for Société Générale.

"Overall, there seemed to be some disconnect between the statement and the press conference and the FOMC minutes might clarify views," said Gallagher.

(END) Dow Jones Newswires

May 22, 2019 07:17 ET (11:17 GMT)