* Fed minutes say economy still far from reaching Fed goals * Eurodollar futures fully pricing in Fed hike by March 2023 * U.S. 5/30 yield curve steepens, reflects fiscal policy concerns (Recasts first paragraph; adds new analyst comment, Fed minutes; updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, April 7 (Reuters) - U.S. Treasury yields were mostly lower on Wednesday after the Federal Reserve struck a dovish tone in the minutes of its March policy meeting, reinforcing expectations that interest rates will remain low for some time. Yields on the front end to the so-called belly of the curve remained down on the day, while those on the very long end were firmer. Market participants were mostly focused on the Fed"s clarification about what constitutes "substantial further progress" for the economy. With their own forecasts projecting the strongest run of economic growth in nearly 40 years, "participants agreed that the economy remained far from the (Fed"s) longer-run goals and that the path ahead remained highly uncertain," the Fed"s minutes stated. The Fed also said "it would likely be some time" before conditions improved enough for the Fed to consider pulling support. "This was the biggest question for the market and the fact there was no hint of tapering or normalization is the biggest takeaway," Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets, said in a research note after the release of the minutes. The Fed also noted that underlying inflationary pressures remained muted, with consumer price inflation through January well below 2%. The Fed said in the minutes it would aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations also remain well anchored at that level. "This serves as a reminder to market participants attempting to bring forward lift-off hike pricing that the Fed is willing to risk being behind the proverbial inflation curve this cycle - a departure from past behavior to be sure," Lyngen said. Following a strong U.S. non-farm payrolls report last Friday, the eurodollar futures market, which tracks interest rate expectations, had fully priced in a Fed hike by December 2022. That came off a bit on Tuesday afternoon, and on Wednesday following the Fed minutes, eurodollar futures showed that market participants are fully factoring a rate increase by March 2023. In afternoon trading, the U.S. 10-year Treasury yield was little changed at 1.656%, from 1.657% on Tuesday. U.S. 10-year yields earlier dropped to a two-week low U.S. 30-year yields were up a bit at 2.34%, from Tuesday"s 2.316%. U.S. 5-year note yields continued their descent, at 0.857% , from Wednesday"s 0.872%. Movements in 5-year notes reflect interest rate expectations, analysts said. Recent declines in the 5-year yield suggested that investors are not really buying views that the Fed will raise rates earlier than expected. At the March meeting, the Fed said it does not expect to raise interest rates until 2024. The yield curve steepened for a second straight session, with the spread between 5-year notes and 30-year bonds widening to 148 basis points on Wednesday. "We have seen some buying on the front of the curve and the belly, but the long end has continued to languish," said Gennadiy Goldberg, senior rates strategist, at TD Securities. "That reflects concerns about the additional fiscal package and additional supply coming down the pipeline." April 7 Wednesday 3:09PM New York / 1909 GMT Price Current Net Yield % Change (bps) Three-month bills 0.015 0.0152 -0.005 Six-month bills 0.03 0.0304 -0.005 Two-year note 99-241/256 0.1547 -0.006 Three-year note 99-200/256 0.3249 -0.011 Five-year note 99-116/256 0.8625 -0.009 Seven-year note 99-128/256 1.3252 -0.007 10-year note 95-32/256 1.6633 0.007 20-year bond 94 2.2513 0.023 30-year bond 89-236/256 2.3463 0.030 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 13.00 -0.50 spread U.S. 3-year dollar swap 16.00 -0.25 spread U.S. 5-year dollar swap 12.00 -0.50 spread U.S. 10-year dollar swap 3.00 -0.50 spread U.S. 30-year dollar swap -23.50 -0.50 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Toby Chopra and Will Dunham)