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The decline in US Treasury prices picked up steam and sent yields higher, after a top Federal Reserve official re-affirmed the central bank’s forecast for two more rate increases this year.

Yields were higher across the curve: The 2-year yield, seen as particularly sensitive to monetary policy, jumped 4.5 basis points to 1.298 per cent, while the 10-year climbed 3.2bps to 2.41 per cent.

Stanley Fischer, the Fed vice chair, said on Tuesday afternoon that three total rate increases this year sounds “about right”.

The remarks may suggest that the central bank plans to increase the rate of tightening from last year, when it only raised rates once, regardless of whether the Trump administration is able to push through policies that are seen as supportive of higher levels of economic growth. Earlier this month, the Fed lifted its benchmark lending rate for the first time in 2017 and held steady its forecast for three interest rate increases this year.

Treasuries rallied sharply beginning about two weeks ago, sending yields lower, as doubts grow about the Republican party’s ability to pass healthcare reform legislation. The initiative failed on Friday, but some Wall Street investors reckon plans to ease the tax burden on corporate America will still be backed by Congress.

Still, yields are far from their recent highs. The 10-year, for instance, crossed above 2.6 per cent earlier this month.

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