Treasury yields edged lower following the Fed's decision to raise rates for a final time in 2017. The 0.25 point hike pushes the target range to 1.5 percent from 1.25 percent.
The central bankers seemed to follow market expectations, making good on its October announcement that, despite inflation, a rate hike was all but certain. Though the committee did adjust its inflation forecast for 2018 to 1.7 percent from 1.6 percent, consistently higher prices have remained elusive.
"We're still looking at three hikes in 2018, which is fully expected," said Ryan Detrick, senior market strategist for LPL Financial. "The big thing to us is that the GDP expectation [for 2018] was higher … They're really upping it to where everyone else already sees it."
With Congressional Republicans rushing to enact tax stimulus, the central bank may be forced to hike rates further should tax cuts put the economy at risk of overheating. A question-and-answer session with Fed Chair Janet Yellen is scheduled for 2:30 p.m ET.
The session also marks one of Yellen's final policy decisions before she hands over leadership to incoming Fed Chair Jerome Powell in February.
The Consumer Price Index (CPI) increased 0.4 percent, according to the Department of Labor, but the core CPI — which excludes volatile food and energy prices — ticked up 0.1 percent, missing expectations. The results raise the year-over-year increase in the CPI to 2.2 percent.
U.S. producer prices posted their biggest annual gain in nearly six years, according a Department of Labor statement on Tuesday, a sign that inflation may be finally creeping higher. The unemployment rate also remains at a historic low at 4.1 percent.