FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie

NEW YORK (Reuters) - The U.S. Treasury yield curve flattened on Wednesday after the Federal Reserve cut interest rates for the third time this year, but signaled that monetary easing could be on hold going forward.

Yields rose, before retracing those gains as the market digested the news. On the day, yields remains down, with the benchmark 10-year yield last 3.4 basis points lower to 1.801% US10YT=RR. The two-year yield US2YT=RR, which serves as a proxy for market expectations of rate cuts, was last down 1.2 basis points to 1.630%.

The spread between the two- and 10-year yields US2US10=TWEB, the most commonly used measure of the yield curve, fell to 17.2 basis points from 19.2 at last close.