Bonds rebound after Fed minutes released

NEW YORK (CNNMoney.com) -- Bonds recovered from early-session losses Wednesday after the Federal Reserve released the minutes to its most recent meeting, which suggested that policy-makers were concerned about inflation and weakness in the economy.

The dollar was higher against the euro and the yen.

The benchmark 10-year note added 4/32, or $1.25 on a $1,000 note, to yield 4.66 percent, down from 4.68 late Tuesday. Bond prices and yields move in opposite directions.

The 30-year bond jumped 9/32, or $2.81 on a $1,000 bond, to yield 4.77 percent, down from 4.79 the previous session.

The five-year note gained 2/32 to yield 4.66 percent, while the two-year note also increased two ticks to yield 4.77 percent.

Releasing the minutes to its Dec. 12 meeting, the central bank said inflation was its primary concern, even if several members said the economy looked "subdued" last month. (Full story)

Although the minutes bolstered Treasury investors, they provided few clues about what the Fed will do with interest rates at its upcoming meetings.

The Fed held interest rates steady at 5.25 percent for the fourth straight meeting in December.

Treasury prices slipped earlier in the session after the Institute for Supply Management issued its December survey of executives in the sector, which rose more than expected to 51.4, up from 49.5 in November.

Economists surveyed by Briefing.com had forecast that the reading would come in at 50, which is the tipping point between pointing to growth and pointing to a contraction in the sector.

A smaller than expected decline in U.S. construction spending in November also prompted some Treasury investors to sell some of their positions.

In currency trading, the euro bought $1.3167, down from $1.3279 late Tuesday. The dollar bought ¥119.36, up from ¥118.81 in the previous session.

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