The 10-year Treasury yield topped 2.17% at one point Wednesday, with the Federal Reserve expected to announce an interest rate hike in the afternoon.
The yield on the benchmark 10-year Treasury note last rose 1 basis point to 2.171%. The yield on the 30-year Treasury bond fell 2 basis points to 2.476%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
The 10-year rate has surged since the beginning of the week, ahead of the Fed’s latest policy decision.
The Fed is expected announce that it will raise interest rates by a quarter point on Wednesday, the first hike since 2018. Watchers also anticipate that the Fed will offer a new quarterly forecast that could indicate five or six more hikes this year.
The central bank is set to announce its decision and economic projections after its two-day meeting wraps up at 2 p.m. on Wednesday, with Fed Chairman Jerome Powell then due to give a briefing.
ING strategists said in a note on Wednesday that they expected the Fed to implement six quarter percentage point rate hikes in 2022 and two more in 2023.
They said it was important to note the role that central banks had in influencing long-dated interest rates.
“In all likelihood, a more hawkish Fed, for instance moving its dot plot to close to the number of hikes we’re expecting in this cycle, would push rates higher,” the strategists said.
Russia’s invasion of Ukraine also remains in focus for investors, with negotiations between officials set to continue on Wednesday. Ukrainian President Volodymyr Zelenskyy has said securing a peace agreement with Russia is beginning to “sound more realistic.”
Russia faces the possibility that it could default on its debt for the first time in decades, with two payments totaling $117 million due on Wednesday.
In economic data, consumers continued to spend in February through at a slower pace than expected, according to a Commerce Department report Wednesday. Advance retail sales grew 0.3% for the month, slightly below the 0.4% Dow Jones estimate.
The National Association of Home Builders’ March housing market index is then due out at 10 a.m. ET.
An auction is scheduled to be held on Wednesday for $35 billion of 119-day bills.
— CNBC’s Samantha Subin, Chloe Taylor and Elliot Smith contributed to this market report.