U.S. government debt yields rose on Tuesday as the Federal Open Market Committee (FOMC) began a two-day meeting, with the yield on the two-year Treasury note clinching a nine-year high and the five-year note notching a seven-year high.
The yield on the two-year Treasury note topped 2.35 percent, its highest level since August 2008, while the yield on the five-year note hit 2.7 percent, its highest since April 2010.
Meanwhile, the yield on the benchmark 10-year Treasury note was higher at around 2.9 percent at 6:56 p.m. ET, while the yield on the 30-year Treasury bond was higher at 3.133 percent. Bond yields move inversely to prices.
US 2-year and 5-year Treasury note yields 10-year chart
Leaders of the FOMC convened Tuesday for the first of a two-day meeting on monetary policy and adjustments to the federal funds rate. The Federal Reserve's policy arm is expected to raise interest rates for the first time in 2018, the first led by newly-appointed Fed Chair Jerome Powell.
"The interesting part of the meeting is really looking at the other items: what will the dot plot look like? Do we see those dots start to shift higher?" said Victoria Fernandez, Managing Director at Crossmark Global Investments, and Head of Fixed Income. [But] "I think there's more risk to the downside in yields than upside … You've started to see some of that get priced in, we're almost 40 percent priced in for that fourth December rate hike. The surprise will be if we don't get that."