2017.09.2115:16:00UTC+00Treasuries Close Roughly Flat After Seeing Early Strength

After an early move to the upside, treasuries pulled back over the course of the trading session on Thursday before closing roughly flat.

Bond prices saw modest strength in morning trading but gave back ground in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.278 percent.

The early strength among treasuries was partly due to bargain hunting following the downtrend seen over the past several sessions.

However, treasuries pulled back as the day progressed as traders continued to digest yesterday's monetary policy announcement by the Federal Reserve.

The Fed left interest rates unchanged as was widely expected but surprised some investors by signaling another rate hike is likely this year.

The central bank's projections pointed to a quarter basis point rate increase later this year, with the rate hike widely expected to come at the December meeting.

The Fed also revealed that it will begin shrinking its $4.5 trillion balance sheet in October, initially allowing $10 billion in bonds to roll off each month.

In her subsequent press conference, Fed Chair Janet Yellen said the process of winding down the balance sheet would be gradual and predictable.

On the U.S. economic front, the Labor Department released a report showing an unexpected decrease in initial jobless claims in the week ended September 16th.

The report said initial jobless claims fell to 259,000, a decrease of 23,000 from the previous week's revised level of 282,000.

The continued decrease surprised economists, who had expected jobless claims to climb to 300,000 from the 284,000 originally reported for the previous week.

A separate report released by the Philadelphia Federal Reserve showed an unexpected improvement in regional manufacturing conditions in the month of September.

The Philly Fed said its index for current manufacturing activity rose to 23.8 in September from 18.9 in August, with a positive reading indicating growth. Economists had expected the index to drop to 17.2.

The Conference Board also released a report showing a bigger than expected increase by its index of leading economic indicators.

Amid a quiet day on the U.S. economic front, remarks by Federal Reserve officials may attract some attention during trading on Friday.