Treasury Yields Continue to Rally Ahead of Fed Meeting

U.S. government bond yields edged up as prices retreated ahead of the closely monitored two-day U.S. Federal Reserve policy meeting scheduled to start on Tuesday.

The yield on the two-year Treasury note, which is particularly sensitive to shifts in Fed policy, advanced 2.1 basis points to 1.359 percent. Meanwhile the yield on the 10-year note advanced 1.4 basis points to 2.215 percent. The yield on the long bond or the 30-year bond advanced 1.5 basis points to 2.867 percent.

Treasury yields rallied due to expectations of a quarter-point rate increase by the Fed by the end of the June policy meeting. Aside from this, investors will also be looking for clues on the pace of the rate increases after the latest one, with odds of a fifth rate hike since December 2015 falling below 50 percent.

Market participants are also expected to look forward to consumer price data slated to be released on Wednesday as Fed policymakers called the weak consumer price data in March and April as temporary to build up a June rate hike.

News are provided by InstaForex