By Ben Eisen, MarketWatch

NEW YORK (MarketWatch) -- Treasury prices advanced Thursday as investors parsed the Federal Reserve's messages from its two-day meeting, which ended on Wednesday. The markets also weighed a number of economic data points, including better-than-expected, third-quarter gross domestic product numbers.

The 10-year Treasury note (10_YEAR) yield, which falls as prices rise, was down 1.5 basis points on the day at 2.310%.

The Federal Reserve said Wednesday it had finished open-market purchases of Treasurys and mortgage-backed securities, though it will continue to reinvest the proceeds of its portfolio. Central bankers sounded a reaffirming note that they have no imminent plans to lift near-zero interest rates, but they signalled growing confidence in the economic recovery.

Data on Thursday underlined the growing strength in the economy, with some caveats. The U.S. economy grew at a 3.5% annual pace in the third quarter as the trade gap narrowed, topping economist expectations of 3% growth. Nonetheless, inventories and consumption remained somewhat soft.

Weekly jobless claims rose by 3,000, but remained low.

The Fed news and economic data have investors adjusting when they expect the central bank to raise key rates. Traders who use fed funds futures contracts are now wagering that the central bank will raise rates in September 2015, according to CME FedWatch, a month earlier than before the Fed statement.

Nonetheless, Treasurys followed the European government bond market higher as investors ditched riskier assets after some weak economic data. The 10-year German bond , which is perceived to be safer, saw its yield fall 4.5 basis points on the day to 0.846%, while the riskier 10-year Greek bond yield surged 52 basis points to 8.135%.

"With Europe moving closer to the edge of deflation, it is very unlikely the Fed will tighten now," said Jonathan Lewis, Chief Investment Officer of Samson Capital Advisors, in e-mailed comments. "Investors are coming to their senses today and yields on short maturity Treasuries are beginning to fall again."

The 5-year note (5_YEAR) yield dropped 3 basis points to 1.578%, and the 30-year bond (30_YEAR) yield rose slightly to 3.049%.

The Treasury Department sold $29 billion of 7-year notes (7_YEAR) to mixed demand, according to interest-rate strategists--its final debt sale of the week.

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