The Treasury auctioned $13 billion 30-year bonds at the highest auction yield in a year, in a sign that traders say foreshadows an eventual end to a long period of extremely low interest rates.
"I think over time, stronger data will have an impact on yields, and we'll see higher yields," said Brian Edmonds, head of interest rate trading at Cantor Fitzgerald. He doesn't expect rates to jump dramatically soon, however.
The bonds were auctioned with a 3.248 percent yield, the highest level in an auction since April, 2012, and above the 1 p.m. level of 3.23 percent. The auction was weak with a bid to cover of 2.43, below the average of the last four of 2.61 percent.
"It does tell us we're going to have to keep a very close watch on rates," said Art Cashin, director of floor operations at UBS. "Everybody's talking about about the Fed might step away. Well, I don't think that's the case."