U.S. Treasury yields remained elevated on Wednesday, hovering near multi-year highs as investors braced for further monetary tightening by the Federal Reserve.

The yield on the benchmark 10-year Treasury note was trading around 3.10%, while the 2-year yield held steady near 2.57%. These levels reflect increasing expectations that the Fed will continue its path of gradual interest rate increases throughout the year.

Strong economic data has bolstered the case for the Fed to maintain its hawkish stance. Recent reports have indicated robust job growth, rising consumer confidence, and moderate inflation, all of which support the central bank’s view that the economy is strong enough to withstand higher borrowing costs.

However, some analysts caution that rising yields could eventually weigh on economic growth by increasing borrowing costs for businesses and consumers. The housing market, in particular, is seen as vulnerable to higher interest rates.

Investors are closely monitoring upcoming economic releases, including inflation data and retail sales figures, for further clues about the direction of monetary policy. Any signs of accelerating inflation could prompt the Fed to adopt a more aggressive approach to rate hikes, potentially pushing Treasury yields even higher.

The market is also keeping an eye on geopolitical developments, which could trigger safe-haven buying of U.S. government bonds and put downward pressure on yields. However, for now, the focus remains firmly on the Fed and the outlook for the U.S. economy.