TREASURIES-Yields fall after Fed meeting minutes, strong 20-year auction

    (Adds analyst quotes and auction results, updates prices)
    By Karen Brettell
    NEW YORK, Aug 18 (Reuters) - U.S. Treasury yields fell on
Wednesday after minutes from the Federal Reserve's July meeting
showed that Fed officials felt the employment benchmark for
decreasing support for the economy "could be reached this year,"
but had not yet been satisfied.
    "Most participants anticipated that the economy would
continue to make progress toward those goals" and that the
standard "could be reached this year," according to the minutes,
but there was disagreement over how soon the Fed should wait to
reduce bond purchases.
    "It's clear from the minutes that the Fed isn't ready to
start tapering yet, but they are leaning towards making an
announcement by the end of the year at the latest," Chris
Zaccarelli, chief investment officer for Independent Advisor
Alliance, said in a note.
    Many analysts and economists expect the Fed to announce a
taper in December, with bond purchase reductions likely to begin
in early 2022.
    Benchmark 10-year notes fell to 1.273%, after
rising to a session high of 1.300% before the minutes were
released.
    "There wasn't a lot in there," said Guy LeBas, chief fixed
income strategist at Janney Montgomery Scott in Philadelphia.
"The financial, market and economic support reasons for
continuing bond purchases are fading a little bit with
normalizing inflation and a stronger labor market, and so it
stands to reason that the policymakers will begin reducing those
purchases relatively soon."
    Powell is also due to speak at the Fed's annual economic
symposium next week in Jackson Hole, Wyoming, and investors will
be watching for any signs that the Fed is becoming more
concerned about the spread of COVID-19 variants including Delta.
    New Zealand's central bank delayed raising rates on
Wednesday as policymakers quickly shifted gears after the
country was put into a snap COVID-19 lockdown over a handful of
new cases.
    The Treasury saw strong demand for a $27 billion sale of
20-year bonds. The debt sold at a high yield of 1.850%, less
than a basis point lower than where the bonds had traded before
the auction.
    The sale "was very well received. It priced aggressively and
garnered solid, near record, demand," Kim Rupert, managing
director for fixed income at Action Economics, said in a note.
    The Treasury will also sell $8 billion in 30-year Treasury
Inflation-Protected Securities (TIPS) on Thursday.

    August 18 Wednesday 3:31PM New York / 1931 GMT
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.06         0.0608    -0.013
 Six-month bills               0.05         0.0507    -0.002
 Two-year note                 99-208/256   0.2215    0.006
 Three-year note               99-210/256   0.4356    0.011
 Five-year note                99-64/256    0.7798    0.016
 Seven-year note               99-162/256   1.0549    0.015
 10-year note                  99-200/256   1.2734    0.015
 20-year bond                  107-88/256   1.806     -0.006
 30-year bond                  102-8/256    1.9107    -0.008

   DOLLAR SWAP SPREADS
                               Last (bps)   Net
                                            Change
                                            (bps)
 U.S. 2-year dollar swap         9.00        -0.25
 spread
 U.S. 3-year dollar swap        10.00        -0.25
 spread
 U.S. 5-year dollar swap         8.25         0.25
 spread
 U.S. 10-year dollar swap        1.25         0.50
 spread
 U.S. 30-year dollar swap      -28.00         1.75
 spread


 (Reporting by Karen Brettell; Editing by Will Dunham and Nick
Zieminski)

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