U.S. Treasury yields fell on Wednesday in choppy trading after data showed the world's largest economy grew much more weakly than expected in the first quarter, offsetting a report that showed private sector employment increased this month.
As expected, the Federal Reserve tapered its massive bond buying by $10 billion, with the decision coming in the wake of poor U.S. growth data.
Figures from the U.S. Commerce Department showed GDP for the first three months of the year expanded at just a 0.1 percent annual rate, the slowest since the fourth quarter of 2012, weighed down by the cold weather. The market was expecting a rise of 1.2 percent.
"We are all told in advance to look at GDP with extreme caution because of the weather, but the market doesn't seem to have done that,'' said David Keeble, global head of interest rate strategy at Credit Agricole in New York.
"The consumption numbers inside the GDP report weren't bad, so it wasn't a disaster. I think pre-positioning, the market was short, and the data sparked a little squaring than conviction-buying.''
Prior to the GDP data, a separate report by payroll processor ADP showed U.S. private employers added 220,000 workers in April, the highest number since November. The ADP figure also came in above analysts' expectations.