U.S. Treasury yields fell on Wednesday as investors weighed the latest batch of U.S. inflation data.

The yield on the benchmark 10-year Treasury note dropped 3 basis points to 2.701%. The yield on the 30-year Treasury bond lost 2 basis points to 2.808%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

The producer price index, which measures the prices paid by wholesalers, increased 11.2% from a year ago, the most in a data series going back to November 2010. On a monthly basis, the gauge increased 1.4%, above the 1.1% Dow Jones estimate.

This batch of data comes following the March consumer price index, released on Tuesday, which showed inflation hit 8.5% last month. The reading was slightly above the forecast 8.4% inflation, and represented the biggest jump since 1981.

However, there were hopes that core inflation could be peaking, as it rose just 0.3% for the month, below the estimated 0.5%.

Daniel Lacalle, chief economist at Tressis Gestion, told CNBC's "Squawk Box Europe" on Wednesday that he was surprised to see such a "robust" opening in markets yesterday.

However, Lacalle pointed out that market sentiment then started to fade with the realization that interest "rate hikes are not going to be enough to curb the inflation implications."

The Russia-Ukraine war also remains in focus, with U.K. intelligence suggesting that Russian forces are preparing for what is expected to be a large and more focused push on expanding control in the east of Ukraine.

Auctions were scheduled to be held on Wednesday for $30 billion of 119-day bills and $20 billion of 30-year bonds.

— CNBC.com staff contributed to this market report.