(Adds quotes, details, updates prices) By Karen Brettell NEW YORK, July 28 (Reuters) - U.S. Treasury yields fell on Wednesday after the Federal Reserve flagged ongoing discussions around the eventual withdrawal of monetary policy support but gave no details on when it is likely to reduce bond purchases. The U.S. economic recovery remains on track despite a rise in coronavirus infections, the U.S. central bank said in a new policy statement that remained upbeat. Fed policymakers, in a unanimous statement, also said they were moving ahead with discussions about when to reduce the central bank"s bond-buying program, a precursor to eventually raising interest rates. "The Fed took another small step forward in their patient and methodical path towards tapering of their bond buying program," Jason England, global bonds portfolio manager at Janus Henderson Investors said in a note. In a news conference following the release of the statement, Fed Chair Jerome Powell said the U.S. job market still had "some ground to cover" before it was time to pull back from the economic support the U.S. central bank put in place in the spring of 2020 to battle the coronavirus pandemic"s economic shocks. "I think there"s important stuff that Powell would rather see such as how the end of the pandemic jobless benefits go, how school reopenings go ... and how the Delta variant evolves over the next couple of months," said Lou Brien, a market strategist at DRW Trading in Chicago. Powell also said that when the Federal Reserve does begin to reduce its bond purchases it will likely cut purchases of mortgage-backed securities at the same pace as Treasuries. Benchmark 10-year yields fell to 1.228%, after briefly rising to a session high of 1.278% immediately after the statement. The yield curve between two-year and 10-year notes flattened to 102 basis points. Fed funds futures traders are pricing for rate hikes to begin in March 2023. The Fed is widely expected to announce a taper this year with bond reductions not likely to begin until year-end of early next year. Some analysts expect that an announcement could come at the Fed"s August Jackson Hole Economic Symposium, while others see that as too soon. Powell said on Wednesday he is in the process of writing a speech to be delivered at the Jackson Hole conference but declined to say what his remarks will focus on. The Fed also said on Wednesday that higher inflation remained the result of "transitory factors," meaning it was not an imminent risk. Some Fed officials have warned that rising price pressures may be persistent. Breakeven rates on five-year Treasury Inflation-Protected Securities, a measure of expected annual inflation for the next five years, rose to 2.63%. The Fed also announced that it will establish two standing repo facilities, one domestic and one for foreign and international monetary authorities, to backstop money markets during times of stress. July 28 Wednesday 4:20PM New York / 2020 GMT Price Current Net Yield % Change (bps) Three-month bills 0.05 0.0507 0.000 Six-month bills 0.0525 0.0532 0.002 Two-year note 99-216/256 0.2035 0.001 Three-year note 100-10/256 0.3617 0.000 Five-year note 99-158/256 0.7031 -0.007 Seven-year note 101-196/256 0.9854 -0.007 10-year note 103-168/256 1.2277 -0.006 20-year bond 107-116/256 1.8007 -0.003 30-year bond 111-36/256 1.8846 -0.004 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.00 0.00 spread U.S. 3-year dollar swap 11.00 0.25 spread U.S. 5-year dollar swap 7.75 -0.75 spread U.S. 10-year dollar swap 1.75 1.50 spread U.S. 30-year dollar swap -25.50 2.25 spread (Editing by Sandra Maler) Our Standards: The Thomson Reuters Trust Principles.