The 10-year Treasury yield popped to its highest level in three years at one point Wednesday, after the Federal Reserve announced an interest rate hike.
The yield on the benchmark 10-year Treasury note jumped 8 basis points to 2.24%, the highest level since 2019. The rate pared gains later in the day, last trading just 1 basis point higher at 2.174%.
The yield on the 30-year Treasury bond fell 5 basis points to 2.444%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
The Fed approved its first interest rate increase in more than three years, bringing its benchmark rate higher by a quarter percentage point to a range of 0.25%-0.5%.
The policymaking Federal Open Market Committee also penciled in rate hikes at each of the six remaining meetings this year, pointing to a consensus funds rate of 1.9% by year's end. The committee sees three more hikes in 2023 then none of the following year.
"By raising interest rates, the Federal Reserve has begun the process of unwinding their pandemic-era stimulus measures in an effort to tame inflation," said Greg McBride, chief financial analyst at Bankrate. "This isn't a one-and-done but the start of a series of rate hikes for the remainder of this year and well into next."
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.
— CNBC's Samantha Subin, Chloe Taylor and Elliot Smith contributed to this market report.