Traders were also adapting to the likelihood of continued interest rates hikes from the Federal Reserve, alluded to in the statement the central bank issued after its policy-setting meeting on Tuesday.
"They're nowhere near stopping, barring any change in the economic outlook," said Adam Brown, co-head of US Treasury trading at Barclays Capital.
The Fed not only raised the benchmark federal funds rate to 4 percent, it also voiced worries about rising prices and signalled further monetary tightening was to come.
"Their concern now is more towards inflation," said Brown. "They've talked about not wanting to see core inflation go above 2 percent - and guess what, it's at 2 percent right now."
Early selling in Treasuries encouraged mortgage investors, worried about losing money because of slower prepayments, to shed their own Treasury holdings, adding momentum to the downward move.
That pushed benchmark 10-year notes 9/32 lower for a yield of 4.61 percent, up from 4.57 percent on Tuesday. Two-year notes dipped 1/32 for a yield of 4.43 percent. Yields move inversely to price.
The Fed's comments following the rate increase on Tuesday was enough to convince analysts at J.P. Morgan that the Fed would not be finished until the fed funds rate got to 5 percent, up from an earlier forecast for a 4.5 percent peak on the target rate.
Benchmark yields briefly spurted to a fresh seven-month high of 4.628 percent, pushed in part by spillover selling from Europe, where central bankers appeared to be moving toward their first monetary tightening in five years.
This environment of rising borrowing costs around the globe made for some treacherous times for trading bonds, with chart-watchers noting that a convincing break above 4.60 percent on benchmark yields could exacerbate the slump.
Five-year notes slipped 5/32 for a yield of 4.50 percent, up from 4.46 percent. The 30-year bond lost 19/32 and was yielding 4.80 percent.
The one-day hiatus in an otherwise packed economic calendar this week also gave dealers time to worry about next week's quarterly refunding.
The Treasury Department said it would borrow $44 billion in new debt next week, unchanged from the previous refunding. The sale would include $18 billion in three-year notes, $13 billion in five-year notes and $13 billion in 10-year notes.
The market would now be hunkering down for the week's remaining big events - a Congressional testimony from soon-to-be-retired Fed Chief Alan Greenspan on Thursday and the government's monthly jobs report on Friday.