Short-term bond yields spiked Wednesday morning ahead of commentary from three voting members of the Federal Reserve, with the two-year note yield reaching 0.816 percent, the highest level since April 2011.
With the central bank considering raising interest rates as soon as December, traders might be trying to adjust asset prices for higher yields, experts said. Remarks from Fed Chair Janet Yellen, Fed Vice Chair Stanley Fischer and New York Fed President William Dudley could provide insights, according to Art Cashin, director of floor operations for UBS at the New York Stock Exchange.
"You've got three people speaking today, with a high likelihood that at least one of them will reinforce [the possibility of a December hike]," Cashin said. "If you're a short-term trader, what you want to do is protect yourself from that, so you pay up for some of the yields because you assume that they will move further."