U.S. Treasury yields reached multiyear peaks, with the 10-year note's yield at its highest since 2014 and maturities at the short end of the curve at decade highs, after economic data on Wednesday bolstered the case for the Federal Reserve to raise rates in December and beyond.

The yield on the benchmark 10-year note was on track for its largest daily jump since the U.S. presidential election in November 2016 as U.S. service sector activity hit a 21-year high and the ADP private payrolls data for September came in stronger than expected.

"This is a bigger reaction to economic data than anything we've seen lately," said Gene Tannuzzo, senior portfolio manager at Columbia Threadneedle Investments.

The upbeat reports on Wednesday are likely keep the Fed on track to raise interest rates again in December and suggest the central bank's tightening policy is unlikely to end anytime soon.

The Fed increased rates last week for the third time this year. Fed Chairman Jerome Powell said on Tuesday the economy's outlook was "remarkably positive."

Meanwhile, the jump in long-term U.S. bond yields on Wednesday is not of immediate concern, Cleveland Federal Reserve President Loretta Mester said, adding that any pronounced “divergence” between the United States and other economies will need to be monitored.

“The fact that interest rates moved on one day is not a concerning thing. Markets are volatile,” Mester told reporters after speaking at a community banking conference in St. Louis.

Mester said, moving forward, “the risk is that we have the U.S. diverging from what is happening to the other global economies and that could feed back ... I don’t find it concerning at the moment, but it is something that we are going to be looking at when we are assessing where the economy is going.”

But for now she said the U.S. central bank was on track to continue its gradual pace of rate increases, joining several of her Fed colleagues on Wednesday in echoing an upbeat assessment of the U.S. economy.

Growth is on track, job gains remain strong, and “I don’t see much evidence that we have high risk on inflation,” Mester said.

“It is still appropriate for us to be moving interest rates up gradually.” 

Early on Wednesday, Fed policy maker Charles Evans, who is among the decision-making committee's most dovish members, indicated he backed a December rate hike, saying the likely path higher for U.S. rates seemed "about as clear as you could write up," at present.

At the long end of the curve, the 30-year yield rose more than 12.5 basis points to 3.342 percent, its highest since September 2014. Benchmark 10-year government yields , which reflect the market's view on the overall health of the economy, were up nearly 12 basis points at 3.179 percent.

The yield on the 2-year note, which reflects market expectations of interest rate hikes, rose to 2.868 percent, its highest since June 2008, when it topped 3 percent. Yields on the 3- and 5-year notes rose to their highest since December 2007 and October 2008, respectively.

The Institute for Supply Management (ISM) said its non-manufacturing activity index jumped 3.1 points to 61.6 last month, the highest reading since August 1997. The survey's factory employment measure rose to 62.4 in September from 56.7 in August.

This suggests September's nonfarm payrolls could surprise on the upside when the government publishes its more comprehensive employment report on Friday. Private payrolls rose by 230,000 jobs in September, the largest gain since February, the ADP National Employment Report showed, after an upwardly revised 168,000 increase in August.