U.S. Treasury yields rose on Wednesday and the yield curve flattened after the U.S. Federal Reserve said it will stop its pandemic-era bond purchases in March and signaled three rate hikes by the end of next year.

The Fed announced it was doubling the pace of its bond-buying "taper," putting it on track to end the program by March.

The timing of the first rate hike, the central bank said, would then hinge on the path of a job market that is expected to continue improving in coming months.

"It's a fairly balanced view in terms of the outlook so from a markets perspective I don't think it should trigger a massive tightening of financial conditions," said Gregory Daco, chief U.S. economist at Oxford Economics in New York.

"The outlook in terms of growth is a little bit stronger for next year, but weaker in the medium run. So it probably points towards a bit of a potential further flattening of the yield curve."

The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 3.8 basis points at 0.697%.

The yield on 10-year Treasury notes was up 2.4 basis points to 1.463% and the 30-year Treasury bond yield was up 3 basis points to 1.849%.

The spread between yields on two- and 10-year Treasury notes was at 76.5 basis points after earlier touching 73.5 bps.

The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 2.67%.

The U.S. dollar 5 years forward inflation-linked swap , seen by some as a better gauge of inflation expectations due to possible distortions caused by the Fed's quantitative easing, was last at 2.351%.

Earlier on Wednesday, U.S. data showed retail sales increased less than expected in November.