New projections showed policymakers at the median expected rates to stay within the new range through 2020. However, in a sign of ongoing divisions within the Fed, seven of 17 policymakers projected one more quarter-point rate cut in 2019.
"They basically kept the door open to further cuts, but didn't really walk through it or commit to walking through it in any way, shape, or form," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.
Benchmark 10-year notes gained 4/32 in price to yield 1.770%, down from 1.784% on Wednesday.
A flattening yield curve also reflected concerns that the Fed may not be aggressive as needed in cutting rates to stem economic weakness.
The yield curve between two-year and 10-year notes has flattened to 2 basis points, from 7 basis points before the Fed statement.
The yield curve inverted in August for the first time in more than a decade, a signal that a recession is likely to follow in one-to-two years, though it has held in positive territory since Sept. 4.
The New York Federal Reserve on Thursday conducted a repurchase agreement (repo) operation for the third consecutive day in a bid to ease funding pressures that on Tuesday sent the cost of overnight loans soaring to 10%.
Falling funding costs helped support demand for Treasuries on Thursday as it made the cost of financing fixed income positions cheaper.
"You're seeing a little bit better performance in Treasuries partly because repo has actually declined," Goldberg said. Concerns about rising tensions between the United States and Iran have also added a safety bid for US debt this week.