2-year Treasury yield rises to a 14-year high as traders assess Fed's next move

Traders work on the New York Stock Exchange (NYSE) at Wall Street in New York City.
Angela Weiss | Afp | Getty Images

U.S. Treasury yields rose on Tuesday after the 2-year rate hit its highest level since November 2007

The yield on the short-term 2-year Treasury note rose as high as 3.497%, its highest level in 14 years. It was last trading up about 4 basis points at 3.466%.

The yield on the benchmark 10-year Treasury note was flat at 3.119%, while the yield on the 30-year Treasury bond dipped 2 basis points to 3.228%. 

Yields move inversely to prices, and a basis point is equal to 0.01%.


On Tuesday European Central Bank policymaker and Estonian central bank Governor Madis Muller said the central bank should discuss a 75-basis-point rate hike in September given exceptionally high inflation.

Markets are still processing a Friday speech by U.S. Federal Reserve Chair Jerome Powell, in which he said the central bank would continue raising interest rates at a level that may cause "some pain" to the economy. 

Powell's comments led to two days of declines for the major U.S. stock market averages.

U.S. equities extended declines on Tuesday from the previous two sessions, after opening higher. The dollar index also weakened slightly after hitting a 20-year high Monday in the wake of market volatility.

— CNBC's Jeff Cox contributed to this report.