Yields on U.S. debt rose on Wednesday after market expectations for a March rate hike zoomed higher.
The two-year note yield, which is more sensitive to monetary policy changes, traded near 1.29 percent and hit its highest level since August 2009. The benchmark 10-year Treasury note yield was up at 2.465 percent.
The yield on 30-year bonds also rose to 3.075 percent. Yields move inversely to prices.
Market expectations for a rate hike on March 15 — when the central bank concludes its next monetary policy meeting — jumped to 67.5 percent, according to Thomson Reuters Eikon.
New York Fed President William Dudley lifted market expectations for a rate hike Tuesday afternoon, after saying he sees a rate hike in the "relatively near future" in an interview with CNN International. He also said the case for a rate hike has become more compelling.
Also lifting rate hike expectations were a series of economic data.
Personal income rose 0.4 percent in January, topping expectations, while consumer spending slowed. However, the personal consumption expenditures (PCE) price index jumped 1.9 percent in the 12 months through January, putting inflation very close to the Federal Reserve's target of 2 percent.
Construction spending fell 1 percent in January, well below expectations, but the February ISM manufacturing index rose to 57.7, expanding on January's 56.0 reading.
Investors also digested President Donald Trump's economic plans, which he described in his first address to a joint session of Congress. He outlined plans for a $1 trillion dollar infrastructure investment, health care reform, immigration reform and tax relief for businesses and the middle class.
Meanwhile, oil markets declined as Brent crude slipped 0.12 percent to trade at $56.44 a barrel, while WTI crude moved 0.24 percent lower to $53.90.