By Kate Duguid

NEW YORK, Feb 8 (Reuters) - Yields on U.S. Treasuries arerising again, as expectations of an economic rebound pushed the30-year yield above 2% on Monday for the first time since thepandemic began and the benchmark 10-year yield climbed to itshighest level since early 2020.

Though they remain historically low, a rapid rise in yieldscan ripple through to other assets, affecting everything fromfinancial stocks to the housing market.

Why are yields rising?

The Federal Reserve cut interest rates to near-zero levelsin March to spur borrowing and kick the economy out of apandemic-fueled recession. Yields across maturities hit recordlows.

But in recent months, breakthroughs in the development ofCOVID-19 vaccines and expectations of more fiscal stimulus undera Democrat-led Congress have pushed some investors out ofTreasuries and into comparatively riskier assets such as stocks.That lifted yields to their recent highs.

The yield on the 30-year Treasury bond overnightMonday rose to 2.006%, its highest since February 2020. Theyield hit an all-time low of 0.702% in March last year as thecoronavirus pandemic began to spread globally. By comparison, onthe first trading day of 2020, the yield closed at 2.340%.

The yield on the benchmark 10-year Treasury noteon Monday rose to 1.200%, its highest since March 2020. It waslast trading at 1.164%.

Real yields, which account for inflation, have edged higherthis year as well, though they still remain in negativeterritory. Those rising inflation expectations signal investorconfidence in the economy.

Where do investors think yields will go next?

Investors generally believe yields will continue theirupward move in 2021, though many think the Fed - which seesrapid jumps in yields as a threat to the recovery - would likelycap a rally that moves too quickly or shoots too high.

A Reuters poll of 60 analysts in December showed a medianforecast of 1.2% for the 10-year Treasury yield over the nextyear.

Some investors are worried about the possibility of aso-called taper tantrum, in which yields rise sharply when theFed begins winding down its stimulus earlier than expected. Inaddition to lifting yields higher, worries over anearlier-than-expected stimulus unwind in 2013 hit investorappetite https://www.reuters.com/article/us-usa-fed-2013-timeline/key-events-for-the-fed-in-2013-the-year-of-the-taper-tantrum-idUSKCN1P52A8for corporate bonds and caused a sharp sell-off in stocks.

The Federal Reserve has gone out of its way to assuremarkets that no such shift is on the near-term horizon. At itsJanuary meeting, the Fed's policymaking committee left its keyovernight interest rate near zero and made no change to itsmonthly bond purchases. It pledged again to keep those economicpillars in place until there is a full rebound from thepandemic-triggered recession.