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The yield on the 2-year Treasury note topped 4.1% after the Federal Reserve raised interest rates by another 0.75 percentage point, and surged to its highest level since 2007.
The policy-sensitive 2-year Treasury rose 15 basis points to 4.113%, to a level not seen since October 2007 when it hit a high of 4.138%.
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Meanwhile, the yield on the benchmark 10-year Treasury hit a high of 3.64%, or the highest level since February 2011 when the 10-yr yielded as high as 3.651%. It was last at 3.587%, up by roughly 1 basis point.
The significant inversion, with short-term rates higher than long-term rates, points to the risk of a recession, some investors believe.
Yields and prices move in opposite directions, and 1 basis point is equivalent to 0.01%.
Treasurys
The Fed raised rates by 75 basis points, or 0.75 percentage point, at its September meeting.
But even that may not be enough, Michael Schumacher, head of macro strategy at Wells Fargo Securities, told CNBC's "Fast Money," explaining that while he is expecting a 75 basis point hike, he would argue for a 150 basis point hike as he believes rates are headed higher still.
Treasurys could also be a source of safety for investors, he added.
"Relative safety I would look at the front-end of the U.S. Treasury curve. You've got the 2-year treasury yielding just about 4%. It's gone up enormously," he said. "If you think about the real yield, which a lot of people in the bond market focus on, it's probably not a bad place to hide out."
The 2-year rate started 2022 trading at around 0.73%. Wednesday's move puts it 328 basis points (3.28 percentage points) above that level.
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