TREASURIES-Yields fall as Fed signals only one more hike

(Recasts with Fed rate decision) By Karen Brettell NEW YORK, March 22 (Reuters) - U.S. Treasury yields fell to session lows on Wednesday after the Federal Reserve raised interest rates by 25 basis points, as was widely expected, and said policymakers believe beating back inflation may require only one more rate hike this year. U.S. central bankers see the policy rate, now in the 4.75%-5.00% range after Wednesday's increase, at 5.1% by year end, according to the median estimate in the Fed's latest quarterly summary of economic projections. “Despite the Fed pressing ahead with a 25bps rate hike today, we see considerable uncertainty in the path ahead and would downplay the significance of updated economic and dot plot projections in such a fast-moving environment,” Ashish Shah, chief investment officer of Goldman Sachs’ public investing business, said in a note. Benchmark 10-year note yields were last at 3.534%, after falling as low as 3.500%. Two-year yields were 4.069%, after dropping as low as 3.958%. The inversion in the closely watched yield curve between two-year and 10-year notes narrowed as far as minus 48 basis points and was last at minus 52 basis points, compared to around minus 60 basis points before the Fed’s decision. Fed funds futures traders are currently pricing for a 62% chance of an additional 25-basis-point rate hike at the Fed’s May meeting. March 22 Wednesday 2:15PM New York / 1815 GMT Price Current Net Yield % Change (bps) Three-month bills 4.605 4.7239 -0.029 Six-month bills 4.7175 4.9133 -0.011 Two-year note 101-6/256 4.069 -0.108 Three-year note 102-28/256 3.868 -0.117 Five-year note 101-144/256 3.6509 -0.095 Seven-year note 102-100/256 3.6071 -0.089 10-year note 99-184/256 3.5336 -0.072 20-year bond 100-24/256 3.868 -0.043 30-year bond 98-188/256 3.6951 -0.041 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 31.50 2.75 spread U.S. 3-year dollar swap 18.75 2.00 spread U.S. 5-year dollar swap 9.50 0.25 spread U.S. 10-year dollar swap 2.25 -0.25 spread U.S. 30-year dollar swap -44.00 1.50 spread (Reporting by Karen Brettell; editing by Jonathan Oatis and Leslie Adler)