Bond Report: 10-year Treasury yield sits just under 2.6% ahead of Fed meeting

Treasurys were slightly lower Monday, allowing yields to continue edging higher, as investors maintained expectations the Federal Reserve will deliver a rate increase at its meeting this week.

“It is a confusing time, with the labor market approaching full employment, inflation on the rise and the fiscal situation in flux. Rate and curve behavior will depend heavily on what can be gleaned about the likely trajectory of rate hikes from the [Fed] meeting,” said Ward McCarthy, chief financial economist at Jefferies, in a note.

The yield on the benchmark 10-year Treasury note TMUBMUSD10Y, +0.39% rose 0.4 basis point to 2.586%, according to FactSet, while the yield on the 2-year Treasury note TMUBMUSD02Y, +0.63% which is more sensitive to official rate moves, rose 0.5 basis point to 1.364%.

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