U.S. Treasury yields moved higher on Wednesday after the Federal Reserve released its policy statement and economic projections, showing increased inflation estimates.

The yield on the benchmark 10-year Treasury note rose more than 7 basis points to 1.575% in afternoon trading, with yields on shorter-dated notes also climbing. The yield on the 30-year Treasury bond was little changed at 2.193%. Yields move inversely to prices. The yields were down for the day before the Fed's decision was released.

The central bank held its target interest rate steady at near zero, but it projected higher inflation ahead.

The Fed changed its headline inflation estimate to 3.4% for the year, a full percentage point above its March projection, and the so-called dot plot showed that central bankers expect rate hikes in 2023, a year ahead of prior estimates.

The central bank reiterated in its policy statement that it expects the price increases to be "transitory."

The Fed was not expected to take any action in this meeting but economists expected the central bank to signal that it is starting to think about tapering bond purchases.

The central bank did not announce a plan to slow those purchases, but Fed Chair Jerome Powell said in a press conference that Fed officials discussed the progress of the economic recovery and how it relates to that program.

"While reaching the standard of 'substantial further progress' is still a ways off, participants expect that progress will continue," Powell said. "In coming meetings, the committee will continue to assess the economy's progress toward our goals. As we have said, we will provide advance notice before announcing any decision to make changes to our purchases."

Yields briefly moved off their highs during Powell's press conference after he cautioned that tapering asset purchases was not imminent and said the Fed's forecast for hikes in 2023 needed to be taken with a "big grain of salt."

Powell did say it was time to retire the "talking about talking about" phrase regarding changing the asset purchases. He had previously used a version of that statement to signal that tapering was not on the Fed's near-term agenda.

Willem Sels, the chief investment officer for private banking and wealth management at HSBC, said the statement and projections were not a huge surprise but did represent a shift in tone.

"This is not a huge surprise, though a bit more hawkish than many economists expected, with the median dot showing two rate hikes by 2023. Prior to the meeting, markets already priced in a good chance for a rate hike in 2022, and several hikes in 2023," Sels said. "As the market had already started to anticipate a change in the Fed's future direction of interest rates, this should limit the impact of today's news, though the immediate market reaction is a mild rise in Treasury yields and somewhat lower equity markets because of that more hawkish tone."

Sels added that the main uncertainty in the market was related to when the Fed would begin tapering its bond purchases.

The Commerce Department released May data for building permits, which fell 3.0% to a rate of 1.681 million units in May, and housing starts, which rose 3.6% to a seasonally adjusted annual rate of 1.572 million units.

Import prices rose 1.1% in May after gaining 0.8% in April, the Labor Department reported Wednesday. Export prices rose 2.2% in May after rising 1.1% in April.

An auction was held on Wednesday for $35 billion of 119-day Treasury bills.

— CNBC's Patti Domm, Pippa Stevens and Tanaya Macheel contributed to this market report.