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Investors sold Treasury bonds Wednesday after data showed the U.S. economy rebounded at a stronger pace in the second quarter than forecast. The report boosted optimism over the growth outlook in the second half and raised concerns that the Federal Reserve may increase official interest rates sooner than investors expect if growth momentum gains further traction.

The selling sent the yield on the two-year note to as high as 0.579%, the highest level since May 2011.

Yields on short-dated bonds are directly affected by the Fed’s official interest rate outlook, while yields on longer-dated bonds are more influenced by the outlook on inflation which chips away investors’ returns on bonds over time.

In recent trading, the benchmark 10-year Treasury note was 18/32 lower, yielding 2.529%, according to Tradeweb. Bond yields move inversely to their prices.

The two-year note was 2/32 lower, yielding 0.571%.

The U.S. economy grew at a seasonally adjusted annual rate of 4% last quarter, higher than the 3% forecast by economists and rebounding sharply from a 2.1% contraction in the first quarter.

“The report put forth the idea that maybe the Fed is slightly behind the curve,” said Dan Mulholland, head of U.S. Treasury trading at BNY Mellon Capital Markets LLC. “We’ve seen the Treasury bond market reprice” the timing for the first rate increase.

Following the report on the U.S. economy, the odds of a rate increase at the Fed’s June 2015 meeting rose to 60% recently, compared with 54% a day earlier, according to data from CME.

Some investors cautioned that the report is subject to revisions, and that wage pressure remains contained, allowing the Fed to be patient in raising interest rates.

“Today’s data represent progress,” said Tony Crescenzi, senior market strategist at Pacific Investment Management Co. in Newport Beach, Calif., which has $1.97 trillion in assets under management. But a “pickup in wages would be more of a game changer” for the Fed’s rate policy rather than a pickup in growth.

The Fed has signaled its interest-rate outlook hinges on how the economy performs. The central bank is scheduled to issue a rate statement Wednesday afternoon after concluding its two-day policy meeting. Economists widely expect the Fed to announce a cut of its monthly bond purchases to $25 billion from $35 billion. Fed Chairwoman Janet Yellen said last month the central bank may need to keep interest rates low for a considerable period.

The 10-year Treasury yield has dropped from 3% at the start of January. Bond prices have climbed due to an uneven pace of global growth, geopolitical tensions in Ukraine and the Middle East and continued ultra low interest rate policy from major central banks.

U.S. bonds offer superior yields compared with their peers in Germany and Japan, which has lured investors seeking relative value. The yield premium investors get by holding the 10-year Treasury note instead of the 10-year German government bond has this month climbed to the highest level since 1999.

Analysts say U.S. bond yields could rise on a stronger U.S. growth outlook and the prospect that the Fed will raise interest rates in a year. This could continue to attract buyers, keeping a lid on the pace of the rise in U.S. yields, they say.