Treasury yields climb

US Treasury yields rose on Wednesday after the Federal Reserve raised interest rates as expected, and signalled two more hikes this year, citing higher inflation.
US two-year yields, the maturity most sensitive to rate hike expectations, touched their highest in nearly 10 years while those on 10-year notes and 30-year bonds rose to three-week peaks and one-week highs, respectively.
The Fed raised its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 percent and 2 percent, and dropped its pledge to keep rates low enough to stimulate the economy "for some time."
Policymakers also projected a slightly faster pace of rate increases in the coming months, with two additional hikes expected by the end of this year, compared to one previously.
The yield curve flattened further after the Fed decision.
The yield spread between US 30-year bonds and US 5-year notes narrowed to 24.4 basis points, the flattest level since January 2012.
Another yield curve measure showed that the gap between US 10-year and two-year note yields compressed further to 39.1 basis points, the tightest since at least March 2010, according to Reuters data.
A flat yield curve suggested expectations of US interest rate increases that have boosted the short end.
"Notably with their latest economic projections, there are upgrades across the board in growth, inflation and employment," said Bill Northey, senior vice president, at US Bank Wealth Management in Helena, Montana.
"You have short-rates pushing up a bit and equity softening up with the likelihood of a fourth rate hike this year," he added.
In afternoon trading, US 10-year yields rose to 3.01 percent, a three-week high, from Tuesday's 2.957 percent. They last traded at 2.988 percent.
US 30-year yields climbed to 3.122 percent, a week peak, compared with 3.092 late Tuesday. Thirty-year yields were last at 3.110 percent.
On the short end of the curve, US two-year yields rose to their highest since August 2008 at 2.602 percent, They were last at 2.586 percent, from 2.541 percent on Tuesday.