Treasury bonds cut gains on Wednesday after the Federal Reserve released the minutes of its most recent policy committee meeting.
The central bank slashed its forecast for U.S. economic growth this year but expressed confidence the recovery was largely on track and would allow it to begin raising interest rates in 2015.
Despite the cut from around 2.9 percent to a range of between 2.1 and 2.3 percent for 2014 growth, the central bank pushed ahead with plans to wind down one of its main stimulus programs by the end of the year, as widely expected.
It reduced its monthly asset purchases from $45 billion to $35 billion a month, divided between $20 billion of Treasury securities and $15 billion of mortgage-backed debt.
Intermediate-dated treasurys also rose, with five-year notes gaining 5/32 in price to yield 1.72 percent.
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U.S. Treasurys prices rose on Wednesday as investors hedged some bets that bonds are likely to weaken, with expectations high that the Federal Reserve may strike a hawkish tone when it releases a statement from its policy meeting this afternoon.
Prices had tumbled on Tuesday after a higher-than-expected consumer price inflation indicator led investors to prepare for the possibility that the Fed will be open to raising rates sooner than some had thought.