Short-term interest rates rose to their highest levels since the financial crisis, as investors bet on more Federal Reserve hikes with inflation showing signs of life.
The yield on the two-year Treasury note hit a high of 2.373 percent, its highest level since Sept. 9, 2008, when the two-year yielded as high as 2.375 percent. Yields retreated off session highs later in the day amid a drop in equity markets.
Minutes from the Federal Open Market Committee's March meeting released this week showed central bankers largely hopeful about the direction of the economy and unanimous in expectations of higher inflation.
A strong report on jobless claims this week along with a positive start to first-quarter earnings season added to investor confidence that the economy is strengthening at a pace that will warrant further tightening by the Fed.
The yield on the benchmark 10-year Treasury note was largely unchanged at 2.828 percent at 1:49 p.m. ET, while the yield on the 30-year Treasury bond was also flat at 3.035 percent. Bond yields move inversely to prices.
Markets have been on edge in recent days after Trump appeared to criticize the Kremlin for its supporting Syrian President Bashar Assad, following a suspected chemical attack last weekend. Markets have since eased, after Trump clarified his position on a possible missile attack in Syria.
Equities rallied after the president clarified his take on Syrian intervention, appearing to give investors confidence to shift money away from so-called safe havens and back into stocks.