(Recasts, updates yields, adds Fed action) By Karen Pierog CHICAGO, Nov 3 (Reuters) - U.S. Treasury yields rose on Wednesday after the Federal Reserve, as expected, said it will commence tapering asset purchases this month, but stuck with its contention that high inflation would be transitory. The benchmark 10-year yield, which fell to a 2-1/2-week low of 1.519% earlier in the session, climbed to a session high of 1.602%. It was last up 4.9 basis points at 1.5963%. The two-year yield, which hit a 19-month peak of 0.5640% last week, was last 3.6 basis points higher at 0.4916%. At the end of its two-day meeting on Wednesday, the Fed said it will in November begin trimming its monthly $120 billion purchases of Treasuries and mortgage-backed securities by $15 billion a month, with plans to end the program in 2022. John Canavan, lead analyst at Oxford Economics, said the Fed"s move was in line with expectations. "Since the knee-jerk response, curve steepening flows have begun to dominate the price action in Treasuries. The committee’s reiteration of their belief that the factors behind elevated inflation are largely transitory was taken as relatively dovish ahead of Fed Chair Powell’s press conference, driving the steepeners," he said in an email. A closely watched part of the yield curve that measures the gap between yields on two- and 10-year Treasury notes was last about a basis point steeper at 110.50 basis points. November 3 Wednesday 2:30PM New York / 1830 GMT Price Current Net Yield % Change (bps) Three-month bills 0.05 0.0507 0.000 Six-month bills 0.07 0.071 -0.003 Two-year note 99-197/256 0.4916 0.036 Three-year note 99-144/256 0.7755 0.053 Five-year note 99-152/256 1.2091 0.060 Seven-year note 99-100/256 1.4671 0.050 10-year note 96-224/256 1.5963 0.049 20-year bond 95-236/256 2.0006 0.031 30-year bond 100-44/256 1.9923 0.034 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 19.75 -0.25 spread U.S. 3-year dollar swap 20.50 -0.75 spread U.S. 5-year dollar swap 7.75 -0.75 spread U.S. 10-year dollar swap 2.25 -0.50 spread U.S. 30-year dollar swap -20.75 0.00 spread (Reporting by Karen Pierog in Chicago and Sujata Rao and Dhara Ranasinghe in London; editing by Jonathan Oatis, Kirsten Donovan)