By Akane Otani 

Selling of U.S. government bonds eased Thursday, sending yields to reverse course after they had jumped to fresh multiyear highs earlier in the week.

The yield on the benchmark 10-year U.S. Treasury note was recently at 2.919%, according to Tradeweb, compared with 2.943% Wednesday, which was the highest closing level since Jan. 9, 2014.

Long bonds also bounced higher, with the yield on the 30-year Treasury bond recently at 3.195%, compared with a nearly three-year high of 3.223% Wednesday.

U.S. stocks and bonds came under pressure late in the trading session Wednesday after the Federal Reserve released minutes from its Jan. 30-31 meeting. The minutes, which some investors saw as striking a more hawkish tone than they had expected, renewed concerns that a pickup in inflation could push the central bank to pick up its pace of interest-rate increases -- something that some investors said had contributed to a wave of selling across global markets earlier in February.

Yet bonds and stocks both bounced higher Thursday, leading some analysts to describe Wednesday's selling as a knee-jerk reaction.

Many investors have remained skeptical about whether recent signs of inflation, including wage growth and consumer price increases, signal a broader trend, as opposed to one-time anomalies. That will make future inflation readings particularly important for the trajectory of the bond market, investors say.

"A continued spike in inflationary readings is going to be by far a much bigger driver in yields than supply and issuance," said Eric Souza, senior portfolio manager at SVB Asset Management.

At the start of last year, for instance, the Labor Department's readings on consumer prices suggested that, after years of stagnant growth, inflation was starting to near the Fed's 2% target. Yet that gauge retreated in the second half of the year, perplexing Fed officials who had expected strong economic growth and falling unemployment to help lift prices.

"That's what I'll be watching for: are we setting up for what we saw last year, or are we going to see a real pickup in the numbers?" Mr. Souza asked.

Later Thursday, investors will be watching the results of the Treasury Department's auction of $29 billion worth of seven-year Treasury notes. Auction results have been mixed as of late, leading some investors to question whether there will be enough demand to soak up additional debt as the federal deficit rises and the Fed pares back its bond purchases.

Various Fed officials are also expected to deliver addresses Thursday, including Raphael Bostic, president of the Federal Reserve Bank of Atlanta, and Robert Kaplan, president of the Federal Reserve Bank of Dallas.

Write to Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

February 22, 2018 11:18 ET (16:18 GMT)