Treasury yields swung wildly Wednesday as traders tried to decipher the Federal Reserve's message on its tightening path after the central bank approved another big rate hike.
The yield on the 10-year Treasury last traded roughly 3 basis points higher at 4.086% after falling below 4% earlier. The policy-sensitive 2-year Treasury yield last traded 7 basis points higher at 4.613%
Yields and prices have an inverted relationship, with one basis point equaling 0.01%.
The Fed on Wednesday approved a fourth consecutive three-quarter point interest rate increase, taking its short-term borrowing rate to a target range of 3.75%-4%, the highest level since January 2008.
Bond yields initially dropped sharply after the Fed's new statement hinted at a possible policy change. It said the Fed "will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments."
However, Fed Chairman Jerome Powell said in a press conference that terminal rate will still be higher than anticipated. The comment caused yields to roll over.
"We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected," Powell said.
Powell added that the time to slow down tightening may come as soon as the next meeting or the one after that. Powell said it was "premature" to talk about pausing hikes.
"We have a ways to go," said the central bank chair.