CHICAGO: US Treasury yields rose on Wednesday after the Federal Reserve, as expected, said it will commence tapering asset purchases this month, but stuck with its contention that high inflation would be transitory.

The benchmark 10-year yield, which fell to a 2-1/2-week low of 1.519% earlier in the session, climbed to a session high of 1.602%. It was last up 4.9 basis points at 1.5963%.

The two-year yield, which hit a 19-month peak of 0.5640% last week, was last 3.6 basis points higher at 0.4916%.

At the end of its two-day meeting on Wednesday, the Fed said it will in November begin trimming its monthly $120 billion purchases of Treasuries and mortgage-backed securities by $15 billion a month, with plans to end the program in 2022.

US yields mixed amid rate policy uncertainty

John Canavan, lead analyst at Oxford Economics, said the Fed's move was in line with expectations.

"Since the knee-jerk response, curve steepening flows have begun to dominate the price action in Treasuries. The committee's reiteration of their belief that the factors behind elevated inflation are largely transitory was taken as relatively dovish ahead of Fed Chair Powell's press conference, driving the steepeners," he said in an email.

A closely watched part of the yield curve that measures the gap between yields on two- and 10-year Treasury notes was last about a basis point steeper at 110.50 basis points.