Treasury yields rise after the Fed pledges to keep buying bonds

U.S. Treasury yields climbed on Wednesday after the Federal Reserve pledged to maintain its bond-buying programs until the economy returns to full employment. 

The yield on the benchmark 10-year Treasury note rose 2 basis points to 0.942%, while the yield on the 30-year Treasury bond gained 3 basis points to 1.693%. Yields move inversely to prices.


Central bank leaders said they would continue to buy at least $120 billion of bonds each month "until substantial further progress has been made toward the Committee's maximum employment and price stability goals," the post-meeting statement said.

"These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses," the Federal Open Market Committee added in a statement that gained unanimous approval.

However, the Fed did not signal it would extend the duration of those purchases, which disappointed some investors. Many had hoped the Fed would tilt its $80 billion Treasury purchases to longer maturities to support the economy.

Elsewhere, investors continued to monitor progress on the stimulus talks. House Speaker Nancy Pelosi called a meeting of congressional leaders on Tuesday to discuss the coronavirus relief funding. Senate Majority Leader Mitch McConnell told reporters as he was leaving the Capitol that "significant progress" was being made on the stimulus package, according to NBC News.

On the data front, U.S. retail sales fell 1.1% in November, compared to a 0.3% drop expected by economists surveyed by Dow Jones. Consumers pulled back on purchases over the past few weeks during the holiday shopping season as the worsening coronavirus pandemic triggered new lockdown restrictions.

Auctions will be held on Wednesday for $25 billion of 105-day bills and $30 billion of 154-day bills.

CNBC's Patti Domm contributed to this article.