Investors will scrutinize the minutes from the Federal Open Market Committee (FOMC) after a dovish statement in January. Fed Chair Jerome Powell had said US central bank policy makers would be "patient" after signs of an economic slowdown roiled financial markets in December. Two-year yields, a proxy for market expectations for rate hikes, were 1.8 basis points lower, at 2.502 percent, suggesting investors expect the minutes to reaffirm a slower pace of rate hikes.
"The FOMC minutes in particular for US rates will be worth watching. We're looking for more details on balance sheet discussions - not only the timing of when runoff will end, but potential discussions around what the reinvestment policy will look like, what the composition of the portfolio will look like," said Jonathan Cohn, interest rate strategist at Credit Suisse.
New York Fed President John Williams on Tuesday said he was comfortable with the level US interest rates are at now, and sees no need to raise them again unless growth or inflation shift to an unexpectedly higher gear. In an interview with Reuters, Williams said he felt rates had reached his current view of a lower "neutral" level, with growth and unemployment leveling off and inflation, if anything, a bit weaker than hoped for.
Treasuries are a safe-haven investment that draw investors in times of global tumult. Tuesday's rise in Treasury prices, and fall in yields, suggested a decreased appetite for risk. The benchmark 10-year government yield was last down 1.4 basis points at 2.652 percent.