Treasuries showed a lack of direction over the course of the trading session on Wednesday before ending the day modestly higher.

Bond prices moved to the upside in late-day trading after spending most of the session lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 2.964 percent.

The modest uptick by treasuries came following the Federal Reserve's announcement of its latest monetary policy decision.

The Fed announcement offered few surprises, as the central bank left interest rates unchanged at 1.5 to 1.75 percent and signaled that an interest rate hike is likely in June.

Economists pointed to a comment from the Fed indicating that the annual rate of inflation is expected to run near its symmetric 2 percent objective over the medium term.

The Fed also said risks to the economic outlook appear roughly balanced and reiterated its expectation that economic conditions will evolve in a manner that will warrant further gradual increases in interest rates.

"Officials remain on course to raise rates again in June and we expect two further 25bp rate hikes in the second half of this year," said Andrew Hunter, U.S. Economist at Capital Economics.

The release of the Fed statement overshadowed the release of a report from payroll processor ADP showing private sector employment increased by slightly more than anticipated in the month of April.

ADP said private sector employment surged up by 204,000 jobs in April after spiking by a revised 228,000 jobs in March.

Economists had expected private sector employment to shoot up by about 200,000 jobs compared to the jump of 241,000 jobs originally reported for the previous month.

"Despite rising trade tensions, more volatile financial , and poor weather, businesses are adding a robust more than 200,000 jobs per month," said Mark Zandi, chief economist of Moody's Analytics.

He added, "At this pace, unemployment will soon be in the threes, which is rarified and risky territory, as the threatens to overheat."

Trading on Thursday may be impacted by reaction to a slew of economic data, including reports on international trade, weekly jobless claims, and service sector activity.

Nonetheless, traders may be somewhat reluctant to make significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

by P2PNews Staff Writer

editorial@p2pnews.com

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