U.S. Treasurys fell Thursday as Federal Reserve officials prepped the market for a March rate hike.
In a CNBC interview Thursday, Federal Reserve Gov. Jerome Powell said economic conditions, such as U.S. inflation and the employment level, are reaching the central bank's ideal state.
"You put that all together and I think the case for a rate increase for March has come together and I think it's on the table for discussion," Powell said.
The benchmark 10-year Treasury note yield held higher at 2.49 percent, while the 30-year bond yield traded near 3.087 percent. The two-year note yield, which hit its highest level since August 2009, traded around 1.32 percent. Yields move inversely to prices.
Late Wednesday, Fed Governor Lael Brainard — a known dove in the central bank's policymaking committee — said in a speech the Fed could raise rates "soon," citing an improved global economy.
"We are closing in on full employment, inflation is moving gradually toward our target, foreign growth is on more solid footing, and risks to the outlook are as close to balanced as they have been in some time," Brainard said.
"Assuming continued progress, it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path."
Yields on U.S. debt rose on Wednesday as investors priced in the increased chance of an interest rate hike in March, after comments by New York Fed President William Dudley lifted market expectations.
Also, economic data indicated inflation was close to the Fed's target of 2 percent.
Market expectations for a rate hike this month are above 60 percent, according to the CME Group's FedWatch tool.
On the data front, initial U.S. jobless claims totaled 223,000, well below the expected 243,000. Last week's reading increased 6,000 to 244,000.
—CNBC's Patti Domm and Reuters contributed to this report.