Treasury yields turned lower on Wednesday after the Federal Reserve promised to keep interest rates near zero until it is comfortable that the U.S. economy is back on its feet.
Following this week's Federal Open Market Committee meeting, the central bank said it would maintain its current interest rate target between 0% and 0.25%.
"The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term," the committee said in its post-meeting statement.
The forward guidance was stronger than most market participants expected and represents a commitment to hold rates near zero and keep them there until full employment returns and inflation gets back to around the Fed's long-stated 2% goal.
Investors also digested positive news about a potential coronavirus treatment. Gilead Sciences said Wednesday it is aware of "positive data" from one of its studies looking at antiviral drug remdesivir as a potential treatment for the coronavirus.
At the same time, U.S. GDP showed the coronavirus dragged the economy into recession. U.S. first-quarter GDP (gross domestic product) fell 4.8% in the first quarter, according to government numbers released Wednesday that provide the first detailed glimpse into the deep damage the coronavirus wreaked on the U.S. economy. Economist surveyed by Dow Jones had expected the first estimate of GDP to show a 3.5% contraction.
Investors also have an eye on signs of any impending reopening of the economy amid the pandemic, with President Donald Trump promising that the U.S. will "soon" be running 5 million tests a day. The highest daily tests the country has run so far was 314,182 on April 22, according to the Covid Tracking Project.
Auctions will be held Wednesday for $25 billion of 119-day bills, $25 billion of 273-day bills and $30 billion of 103-day bills.
— CNBC's Elliot Smith contributed reporting.