The 2-year Treasury yield hit its highest level since June 2008 after the Federal Reserve showed no signs of changing course on its plans for further rate hikes despite recent turbulence in financial markets.
The Fed's policymaking arm, the Federal Open Market Committee, unanimously held the federal funds rate in a range of 2 percent to 2.25 percent. Markets had forecast the central bank would stay the course this meeting and still see the Fed approving a quarter-point hike in December.
"The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term," FOMC members said in statement, using the exact language they'd used prior.
Fed officials, responsible for keeping unemployment low and inflation tame, have gradually increased interest rates under the central bank's chairman, Jerome Powell, as they try to prevent the U.S. economy from overheating.
As of 2:26 p.m. ET, the yield on the benchmark 10-year Treasury note rose to around 3.239 percent, while the yield on the 30-year Treasury bond fell to around 3.435 percent. Bond yields move inversely to prices. The 2-year rate held at a decade high of 2.973 percent.