U.S. benchmark Treasury yields edged higher on Thursday, touching their two-year high of 3 percent, in light trading as most investors stayed out of the market after the Christmas holiday.
On light trading volume, benchmark 10-year Treasury notes yielded 3.002 percent in the morning, but ticked lower to 2.994 percent in the afternoon. Yields extended their climb after U.S. jobless claims fell to their lowest in nearly a month, stoking new speculation abut the strength of the recovery.
"Three-point-five percent is probably fair value, or where the 10-year should be, as it tends to track nominal GDP over time," said Jack Ablin, chief investment officer at BMO Private Bank. "The question is, can the stock market overcome that head wind, or the battle between accelerating top-line growth and accelerating interest rates."
Thirty-year bond yields edged higher, yielding 3.926 percent.