US Treasury yields whipsaw after Fed statement release

Federal Reserve Chair Janet Yellen speaks at a news conference following the two-day Federal Open Market Committee meeting in Washington March 18, 2015.
Joshua Roberts | Reuters

U.S. Treasury yields traded back-and-forth on Wednesday after the Federal Reserve delivered a statement in which it removed all calendar references to raising interest rates.

The FOMC indicated after its March meeting that a rate hike in April was unlikely. The U.S. central bank has kept its key funds rate anchored near zero since late-2008 to spark the economy during the financial crisis.

Officials have indicated a desire to raise rates at some point this year, with the market now anticipating a September increase.

Benchmark 10-year yields were most recently at 2.0461 percent after trading at 2.0425 percent before the statement's release. Seven-year note yields edged lower from 1.7945 percent to 1.7909 percent following the release. Thirty-year bond yields rose from 2.7485 percent to 2.7549 percent.

Earlier, yields on U.S. government debt edged slightly lower after the Treasury Department auctioned $29 billion in seven-year notes at a high yield of 1.820 percent.

The bid-to-cover ratio, an indicator of demand, was 2.44, slightly lower than a recent average of 2.47. It was, however, the highest demand level since January.

Indirect bidders took 54.1 percent, higher than a recent average of 50 percent. Direct bidders took 12.8 percent, slightly lower than a recent average of 13 percent.

"With yields at a 6-week high and ahead of the FOMC statement, the 7-year note auction was uneventful but decent. The yield was slightly below the when issued but the bid to cover of 2.44 was below the previous 12 month average of 2.51," Peter Boockvar, chief market analyst at The Lindsey Group, said in a note.

The auction was also the last of three Treasury Department fixed-rate offerings, which total $90 billion.

Read MoreInvestors on Fed watch as statement, GDP come out


Earlier, U.S. government debt yields bounced back-and-forth, with 10-year bonds breaking back below 2 percent at one point, after government data showed the economy grew less than expected in the first quarter.

Yields on U.S. 10-year bonds stood at 2.026 percent before the first-quarter GDP data, and fell as low as the 1.99 percent range after the data.

The economy grew at 0.2 percent in the first quarter. Economists had on average expected growth of 1 percent.

—CNBC's Jeff Cox contributed to this report.