TREASURIES-Bonds steady after Fed minutes fail to surprise

(Recasts with Fed minutes, adds auction results, updates

prices)

* Fed minutes maintain expectations for Dec (Shanghai: 600875.SS - news) rate hike

* Solid demand for three-year, 10-year supply

By Karen Brettell

NEW YORK, Oct (Shenzhen: 000069.SZ - news) 11 (Reuters) - U.S. Treasury prices were

little changed on Wednesday after minutes from the Federal

Reserve’s September meeting were in line with expectations and

after the Treasury Department saw solid demand for three-year

and 10-year note supply.

Fed policymakers had a prolonged debate about the prospects

of a pickup in inflation and the path of future interest rate

rises if it did not.

"There’s really nothing that stood out. The market reaction

has been relatively muted," said Subadra Rajappa, head of U.S.

rates strategy at Societe Generale (Swiss: 519928.SW - news) in New York.

"We go back to focusing on inflation, that’s really where we

need more clarity to get a sense of where things are headed for

the rest of the year," Rajappa said.

Benchmark 10-year notes were last up 2/32 in

price to yield 2.339 percent, down from 2.345 percent on

Tuesday.

The 10-year yields jumped to 2.402 percent on Friday, the

highest level since May 11, after the government’s employment

report for September showed a rise in wages that boosted

expectations inflation is increasing.

Consumer price data on Friday will be scrutinized for

confirmation of higher prices, though many analysts have said

that data is muddied by recent hurricanes.

Adverse weather is seen as having impeded lower-income

workers from getting to work more than it did higher-income

workers.

The Fed minutes maintained expectations that the U.S.

central bank is likely to raise rates again at its December

meeting.

Its policy statement last month was seen as hawkish, and

that view gained further credence in the wake of strong U.S.

economic data and Fed officials' comments.

"Speakers (Milan: BEC.MI - news) have been out in force recently, and I think

they've been pretty clear that a December rate hike is certainly

on the table," said Thomas Simons, a money market economist at

Jefferies in New York.

The Treasury saw solid demand for $24 billion in three-year

notes and $20 billion in 10-year notes on Wednesday, part of $56

billion in new coupon-bearing supply this week.

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The government will also sell $12 billion in 30-year bonds

on Thursday.

(Reporting by Karen Brettell; Editing by Paul Simao and

Jonathan Oatis)

)