U.S. Treasury yields pulled back on Wednesday as investors digested comments from Federal Reserve policymakers about the state of the economy and monetary policy outlook.

The yield on the 10-year Treasury fell almost 8 basis points to 4.581%. The 2-year Treasury was last at 4.928% after retreating by nearly 4 basis points — trading below the key 5% mark it briefly crossed on Tuesday.

Yields and prices have an inverted relationship. One basis point equals 0.01%.

Investors considered the path ahead for interest rates after comments from Federal Reserve officials, including Chairman Jerome Powell.

On Tuesday, he said there has been a "lack of further progress" on inflation so far this year. Recent economic data has also shown growth and strength in the labor market, he added.

The Fed has repeatedly said that it is looking for data to show that inflation is easing sustainably, and the overall economy is cooling before starting to cut interest rates. But Powell on Tuesday indicated that policymakers had not yet reached this point.

"The recent data have clearly not given us greater confidence, and instead indicate that it's likely to take longer than expected to achieve that confidence," he said.

Earlier in the week, San Francisco Federal Reserve Bank President Mary Daly said there was "no urgency" for rate cuts to begin.

The comments fueled questions about whether there may be fewer rate cuts than expected this year and whether they may begin later than anticipated.