Following a pullback in the previous session, U.S. Treasury yields moved higher early Wednesday as investors awaited the results of a closely watched 10-year note auction and the minutes from the Federal Reserve's most recent policy meeting.

The benchmark 10-year Treasury yield rose 3 basis points to 5.307%; the 30-year Treasury yield added 4 basis points to 5.69%; and the 2-year Treasury yield climbed 1 basis point to 4.801%. One basis point equals 0.01%, and bond yields move inversely to bond prices.

Market data: 10-year Treasury: 5.322%, +0.051; 11-month Treasury: 3.942%, -0.001; 1-year Treasury: 4.464%, +0.016; 2-year Treasury: 4.808%, +0.017; 30-year Treasury: 5.704%, +0.063; 3-month Treasury: 4.164%, +0.023; 6-month Treasury: 4.295%, +0.002.

Investors face two key events on Wednesday. At 2 p.m. Eastern Time, the FOMC meeting minutes will be released, and the market will scrutinize them for clues about the Fed's monetary policy decisions. At the Fed's September policy meeting, policymakers voted to raise interest rates, the first hike since 2023.

Over the past six weeks, concerns about inflation and rising energy prices have triggered a bond selloff, pushing Treasury yields steadily higher. According to CME's FedWatch tool, traders are currently pricing a 78% probability that the Fed will leave rates unchanged at its next meeting.

The U.S. Treasury Department plans to auction $39 billion of 10-year notes on Wednesday. Amid multiple concerns over inflation, debt levels, and duration risk, the auction will test whether current yield levels are sufficient to attract buyers, or whether investors will demand a higher risk premium.

Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets, and other analysts said in a research note after Tuesday's close: "The bidding results from Tuesday's 3-year note auction were encouraging — the auction stopped slightly above the issue rate, but did not repeat the weak tails seen in several previous coupon-bearing Treasury auctions."

The analysts added: "It goes without saying that Wednesday's 10-year supply is far more important as a directional signal for the U.S. rates market. Although demand at the 3-year auction was decent, ahead of the 10-year reopening we expect the market will need to see a clear concession, either in the bond itself or along the yield curve."