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2-year note yield slides to 1.312% after Fed interest rate hike

Bond traders at CME Group
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U.S. government debt prices were higher on Wednesday after the Federal Reserve announced an interest rate hike.

The central bank raised rates by 0.25 pointsand signaled two more hikes this year. Wednesday's hike moves the overnight federal funds rate to a target range of 0.75 percent to 1 percent.

Following the announcement, the yield on the benchmark 10-year Treasury notes, which moves inversely to price, was lower at around 2.509 percent, while the yield on the 30-year Treasury bond was also lower at 3.108 percent. The yield on the 2-year note was lower at 1.312 percent.

The yield on the 10-year note was around 2.575 percent ahead of the announcement.

Earlier in the day, the 2-year hit a high of 1.401 percent, its highest level since June 11, 2009, when the 2-yr yield was as high as 1.421 percent. The 2-year yield then turned negative and hit a low of 1.312 percent, its lowest level since March 7 when the 2-year yield was as low as 1.301 percent.

This would be its second interest rate hike in three months and its third hike in 10 years.The market consensus expected the Fed to lift rates by a quarter point and its upbeat economic outlook for the U.S.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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Elsewhere, the Labor Department said consumer prices rose 0.1 percent in February, while the Commerce Department said retail sales ticked up a seasonally adjusted 0.1 percent in February.

Business inventories for January and national association of home builders (NAHB) data for March are both scheduled to be released at 10 a.m ET.

In oil markets, Brent crude traded at around $51.74 a barrel on Wednesday morning, up 1.61 percent, while U.S. crude was around $48.77 a barrel, up 2.20 percent.

Oil prices recovered from three-month lows in the previous session after data showed an unexpected drawdown in U.S. stockpiles.

-CNBC's Luqman Adeniyi contributed to this report.