* Geopolitical concerns boosts demand for U.S. bonds
* Fed meeting minutes seen as dovish
* Treasury to sell $30 billion in seven-year notes
By Karen Brettell
NEW YORK, May 24 (Reuters) - U.S. Treasury yields fell on Thursday as concerns about U.S. talks with North Korea and a tumbling Turkish lira boosted demand for low-risk U.S. debt.
North Korea followed through on a pledge to blow up tunnels at its nuclear test site on Thursday, media reported, after announcing in April it would suspend nuclear and missile tests and scrap the test site.
Progress, however, appears to have suffered a setback this month with North Korea and the United States both raising doubts about whether an unprecedented June 12 summit in Singapore between North Korean leader Kim Jong Un and U.S. President Donald Trump will take place as planned.
Meanwhile Turkey’s lira weakened more than 2 percent on Thursday, giving up some of the hefty gains it made after the central bank raised interest rates by 300 basis points on Wednesday in an emergency move to prop up the tumbling currency.
“The geopolitical backdrop is still something that is causing a flight to quality in U.S. Treasuries,” said Tom di Galoma, a managing director at Seaport Global Holdings in New York.
“Investors are worried in general about the state of what’s going to happen in North Korea with the June 12th talks, and they are also concerned about how deep is this crisis in Turkey,” di Galoma said.
Benchmark 10-year notes gained 7/32 in price to yield 2.979 percent, down from 3.003 percent late on Wednesday.
Yields also have fallen after minutes from the Federal Reserve May meeting on Wednesday gave no new clues that three additional rate hikes this year are likely.
Fed policymakers, including Chairman Jerome Powell, have been eager to stress they will tolerate inflation rising above the Fed’s goal for a time without undue concern. An additional two rate hikes this year, including one in June, are widely expected.
Stronger demand for U.S. bonds may help the Treasury sell $30 billion in seven-year notes on Thursday, the final sale of $99 billion in coupon-bearing supply this week.
Dealers have taken a larger-than-usual share for the two previous auctions, showing that the market is struggling to absorb larger auction sizes.
Thursday’s seven-year sale is $2 billion larger than the size of the auction in January and $1 billion larger than last month.
Reporting by Karen Brettell; Editing by Will Dunham