May 22 (Reuters) -

U.S. Treasury yields rose on Wednesday after minutes from the Federal Reserve's latest policy meeting showed central bank officials were concerned about higher inflation but still had faith price pressures would ease, if slowly.

The Fed signaled at its April 30–May 1 meeting it is still leaning toward eventual reductions in borrowing costs but acknowledged that disappointing inflation readings in the first quarter could delay those rate cuts.

While the policy response for now would "involve maintaining" the Fed's benchmark policy rate at its current level, the minutes released on Wednesday also reflected discussion of possible further hikes.

"The minutes appear to be a bit more hawkish than what we heard from (Fed Chair Jerome) Powell at the post meeting press conference," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.

"They clearly seem to be concerned about inflation, they are much more open to perhaps hiking if needed," Rajappa said. "This means higher for longer on policy."

Data released since the Fed meeting have shown inflation cooling in April, with consumer prices rising less than expected and U.S. job growth also slowing more than expected.

Fed policymakers in recent comments, however, have emphasized waiting several more months to ensure that inflation really is on track toward its 2% target before cutting rates.

"April payrolls and April CPI were two good data points for the rates market. However, the Fed has told us they need a good amount more data in order to be thinking about actual rate cuts, which makes sense given how strong the data was in the first quarter," said Angelo Manolatos, macro strategist at Wells Fargo in New York.

Fed funds futures traders are pricing in 40 basis points of cuts by year-end, with the first cut seen possible in September.

With Fed policy now largely data dependent, the market may be likely to consolidate as it waits for May's jobs data and inflation readings.

The Fed will next meet on June 11-12 when it will update its economic and interest rate projections.

Benchmark 10-year note yields were last up 2 basis points at 4.434%

Interest rate sensitive two-year yields gained 5 basis points to 4.8796%.

The inversion in the yield curve two- and 10-year maturities widened around 3 basis points to minus 45 basis points, the deepest since April 10.

Yields rose earlier on Wednesday in line with those on European government debt after data showed that UK inflation eased less than expected and a key core measure of prices barely dropped.

British Prime Minister Rishi Sunak also called a national election on Wednesday for July 4.

The Treasury Department sold $16 billion in 20-year bonds on Wednesday at a high yield of 4.635%, close to where it had traded before the auction. The bid-to-cover ratio was 2.51 times, the lowest since February.

The Treasury will also sell $16 billion in 10-year Treasury Inflation-Protected Securities (TIPS) on Thursday.

(Reporting by Karen Brettell Editing by Christina Fincher and Richard Chang)