By Ellie Ismailidou, MarketWatch

Treasury yields finished higher Wednesday after the Federal Reserve's policy-making committee slightly upgraded its assessment of the U.S. economy but didn't specify the timing of an interest-rate increase.

"The Fed's policy statement (http://www.marketwatch.com/story/federal-reserve-is-noncommittal-on-timing-of-first-interest-rate-hike-2015-07-29) keeps the door open for a rate increase sometime in 2015, without committing to a specific date," said Tom Kersting, fixed-income strategist at Edward Jones.

The Treasury market had a "knee-jerk reaction" to the news, Kersting said, with yields changing direction several times in a roughly two-basis-point range, before finishing 2.7 basis points higher on the day.

The volatility was also attributed to low trading volumes that are usual in summer months, as overall Treasury volumes were at around 67% of the average.

The yield on the 10-year Treasury rose 2.7 basis points to 2.279%, according to Tradeweb. The yield on the two-year note gained 1.1 basis point to 0.704% and the yield on the 30-year bond added 2.5 basis point to 2.989%.

Treasury yields rise when prices fall and vice versa.

The yield on the 10-year Treasury moved within a 3.5-basis-point range throughout the day on Wednesday--much tighter than in June, when yields were up around eight basis points ahead of the Fed's policy statement and later plummeted about 7.5 basis points after policy makers signaled that the pace of rate hikes would be slower than the market expected.

Though Wednesday's policy statement wasn't followed by a news conference like the policy statement for June.

Guy LeBas, chief fixed income strategist at Janney Capital Markets, said the reaction in the rates market was overall muted.

"We saw an ever so slight steepening [of the Treasury yield curve], with the belly of the curve outperforming by about a basis point and the long bond underperforming by a similar margin," LeBas said in a note. The so-called belly of the curve refers to Treasurys of three to seven-year maturities.

Regardless of the liftoff date, the size of the first rate increase will be the most important indication regarding the Fed's intensions, analysts said.

"When we're talking about a 25-50 basis-point move, we are not really talking about tightening...that's still a very accommodating monetary policy," said Kirk Barneby, portfolio manager of the Centre Active U.S. Treasury Fund at Centre Funds.

Meanwhile, U.S. stocks also moved higher amid a flurry of earnings reports and as investors digested the Fed's policy statement.

In Europe, government bonds were also under selling pressure on Wednesday, while and investors sold bonds in favor of riskier assets. The yield on the benchmark German 10-year bund gained 2.2 basis points to 0.672%.

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