U.S. Treasury prices plunged after Fed speakers raised the odds of a March rate hike.
U.S. Treasury prices plunged after comments from Federal Reserve officials led traders to ramp up bets that the central bank will raise interest rates in the middle of next month.
The market-implied probability of a March hike soared above 70 percent. It had been at 50 percent on Monday. These estimates are based on the assumption that the effective fed funds rate will trade at the middle of the new FOMC target range after the hike.
The yield on the benchmark two-year Treasury coupon maturity is the most sensitive to Fed expectations. This coupon maturity rose almost 7 basis points to 1.26 percent. In addition, the 10-year yield increased to 2.39 percent.