LONDON, May 4 (Reuters) - Most U.S. Treasury yields were just a touch higher on Wednesday, keeping multi-year highs in sight, with the Federal Reserve widely expected to a deliver a hefty 50 basis point interest rate hike later in the day.
Two-year Treasury yields, the most sensitive to interest-rate changes, briefly touched 2.82% -- their highest levels since late 2018. In London trade, they were up around 2 bps on the day at 2.78%.
Yields on five-year bonds were also a touch higher at 3.02% , having touched their highest since late 2018 at 3.05%.
Ten-year bond yields were little changed on the day and holding just below the 3% mark hit on Monday for the first time in over three years.
Overall trade across bond markets was generally subdued ahead of the Fed meeting.
Investors will be looking to get a sense of whether a series of aggressive rate hikes to contain inflation are on the cards.
The Fed is also expected to announce the start of reductions to its $9 trillion balance sheet as the central bank intensifies efforts to contain high inflation.
"In terms of their guidance, it will be interesting to see whether we get a sense of urgency in getting rates back to a neutral level," said Chris Scicluna, head of economic research at Daiwa Capital Markets in London.
"Also, we'll see if the Fed is mindful of downside risks to growth and whether they could inadvertently push the economy into recession." (Reporting by Dhara Ranasinghe; Editing by Saikat Chatterjee)