2017.09.2022:10:00UTC+00U.S. 2-Year Treasury Yield Rise after Fed Announcement

U.S. Treasury yields increased on Wednesday after the Federal Reserve kept its near-term outlook on interest rate hikes and announced it will start reversing next month a massive bond-purchase program which started during the financial crisis.

The U.S. 2-year Treasury yield rose following the announcement and notched a peak of 1.451 percent, its highest level since Nov. 5, 2008.

U.S. bond yields increased, pulling up the dollar following the Fed's decision, but U.S. benchmark stock indexes were flat.

U.S. benchmark 10-year Treasury note yields were up as far as 2.29 percent, the highest since Aug. 8, a move which supported bank stock prices to go higher. The U.S. 30-year Treasury yield also briefly climbed before trading marginally lower near 2.81 percent.

In its policy statement, the Fed noted low unemployment, growth in business investment, and an economic expansion that has been moderate but strong in 2017 as justifying its decision. The U.S. central bank adds that the near-term risks to the economic outlook remained “roughly balanced” but said it was “closely” watching inflation.