The yield on the 10-year Treasury note rose as high as 2.75 percent on Wednesday after the Federal Reserve said inflation would move higher this year. The central bank left its benchmark rate unchanged.
Yields pulled back later in the day as many traders were expecting the Fed's upgraded assessment of inflation and the economy. The yield on the 30-year Treasury bond fell to 2.945 percent, while the 10-year yield fell to 2.72 percent. Bond yields move inversely to prices.
The Fed did not make any changes to its policy stance, though the central bank indicated that it anticipates inflation to heat up as the year progresses. According to December estimates, officials expect three rate hikes this year so long as there is no significant disruption to market conditions
"Inflation on a 12-month basis is expected to move up this year and to stabilize around the Committee's 2 percent objective over the medium term," the statement said. "Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely."
The FOMC meeting also marked the last time Janet Yellen acted as chair of the central bank; Jerome Powell will take the reins thereafter.
"I think 2.65 percent was really significant. That was a fairly important level," said Robert Sluymer, technical strategist at Fundstrat Global Advisors. "The 30 year has backed away from the highs of yesterday and the 10-30 curve is still flattening. I don't think rates are going meaningfully higher from here."