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Treasuries moved mostly lower over the course of the session on Wednesday as traders reacted to the Federal Reserve's monetary policy announcement.
Bond prices initially moved higher after the Fed announcement but came under pressure going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.2 basis points to 1.336 percent.
The lower close by treasuries came after the Fed hinted tapering of its asset purchases could begin in the near future amid continued progress towards it goals of maximum employment and price stability.
The Fed said in the announcement of its latest monetary policy decision that a "moderation in the pace of asset purchases may soon be warranted" if progress towards its dual goals continues broadly as expected.
The central bank currently plans to continue its bond purchases at a rate of at least $120 billion per month but is expected to begin scaling back later this year.
The comments about tapering asset purchases came as the Fed announced its widely expected decision to keep the target range for the federal funds rate at 0 to 0.25 percent.
The Fed also reiterated that it expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with maximum employment and inflation is on track to moderately exceed 2 percent for some time.
However, the latest projections from the Fed showed a majority of officials now expect interest rates to be raised next year compared to previous forecasts calling for the first rate hike in 2023.
Fed officials also downwardly revised forecasts for U.S. GDP growth in 2021 to 5.9 percent from 7.0 percent, while forecasts for GDP growth in 2022 were upwardly revised to 3.8 percent from 3.3 percent.
Trading on Thursday may continue to be impacted by reaction the Fed announcement, although traders are also likely to keep an eye on the weekly jobless claims report.
