The Fed is not expected to announce any plans to pare its bond purchases until its August Jackson Hole economic symposium, though it may start dropping hints that it has started to talk about a taper.
"This rally in rates seems very counterintuitive. I still haven't found a very strong case besides perhaps the offset of positioning, people are getting out of trades ahead of the FOMC," Rajappa said.
Yields on the front end to the so-called belly of the curve were down, while those on the very long end were firmer. US 10-year yields, however, dropped to a two-week low.
In mid-morning trading, the US 10-year Treasury yield was little changed at 1.656%, from 1.657% on Tuesday.
"The yields rising indeed brought more demand for the US dollar...(but) the Fed meeting was actually very bullish for value or cyclical assets," said a Singapore-based metal trader.
"Inflation potential can only come if there is an issue in terms of resources, in particular if there is more or less full employment and that something we are not seeing right now," Blanco explained.