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NEW YORK — Treasury prices rebounded Wednesday as the Federal Reserve reduced its full-year economic outlook and said unemployment could hit nearly 10 percent.
The central bank also indicated in minutes released from its meeting last month that it might increase the total amount of government debt it intends to buy this year. The Fed said some policymakers thought another increase in Treasury purchases might be warranted.
Earlier this year, the Fed said it would buy up to $300 billion in government bonds. The aim was to raise prices, and in turn lower rates, by reducing supply.
On Wednesday, the Fed bought $7.7 billion in government debt.
As the Dow Jones industrial average fell 53 points, the benchmark 10-year Treasury note rose 16/32 to 99 13/32. Its yield fell to 3.19 percent from 3.25 percent late Tuesday. Prices move opposite yields.
The 30-year bond rose 1 6/32 to 101 25/32. Its yield fell to 4.15 percent from 4.22 percent.
The two-year note rose 3/32 to 100 2/32. Its yield fell to 0.84 percent from 0.89 percent.
The yield on the three-month Treasury bill was flat at 0.17 percent. The discount rate was 0.18 percent.
The cost of borrowing between banks sank to another record low. The British Bankers' Association said the London Interbank Offered Rate, or Libor, on three-month loans in dollars fell 0.03 percentage point to 0.72 percent.
