Long-term Treasurys Sell Off After Fed Decision

NEW YORK (AP) — Long-term Treasurys sold off sharply Wednesday after the Federal Reserve reaffirmed its pledge to keep interest rates low for "an extended period."

In late trading, the 10-year Treasury, often used as a benchmark for consumer borrowing, fell 15/32 to 100 25/32, pushing its yield up to 3.53 percent from 3.47 percent late Tuesday.

The Federal Reserve left interest rates near zero, as expected, at the conclusion of its two-day policy meeting Wednesday afternoon, downplaying the threat of inflation and reiterating the need to keep rates low for some time to support the economic recovery.

Analysts said the bond market is worried about the effects of keeping interest rates so low for a prolonged period of time.

"The concern is that maybe the Fed is too focused on unemployment and growth and not concerned enough about the inflation outlook," said Carl Lantz, fixed income strategist at Credit Suisse. "To be fair, inflation is low and falling, but the market is very concerned about what will happen over the long term."