The yield on the benchmark 10-year U.S. Treasury note topped 2% for the first time in 2-1/2 years on Thursday after data showed that inflation in the United States rose more than expected in January.

The 10-year note yields hit 2.001%, before dipping back to last trade at 1.986%. Bond yields have been climbing as investors anticipate the Federal Reserve will begin to tighten monetary policy to combat inflation, starting with an interest rate hike in March, as well as expectations the U.S. central bank will begin to wind down its balance sheet.

The Consumer Price Index rose 0.6% in January and was up 7.5% on a year-on-year basis.

Before the move on Thursday, the 10-year yield was last above 2% on Aug. 1, 2019, at a time when yields had been moving lower for several months on concerns about the economic outlook, with trade tensions between the United States and China running high. Those concerns and tepid inflation prompted the Fed in July 2019 to cut interest rates for the first time in a decade.

The yield curve between two-year and 10-year notes inverted on Aug. 14, 2019, a bearish signal that typically indicates that a recession will follow in the next six months to two years.

A recession followed in early 2020, when businesses across the country were shut in response to the spread of COVID-19. The Fed is now under pressure to reverse the policies it enacted due to the economic fallout from the pandemic, which included cutting its benchmark overnight interest rate to the near-zero level in March 2020.