Treasuries-10-year yields reach two-month high as oil prices rise
TLT•Two-year and 10-year yields move higher
The 2-year note US2YT=RR yield, which typically moves in step with Fed interest rate expectations, rose 4.65 basis points to 4.262%.
The yield on benchmark U.S. 10-year notes US10YT=RR rose 3.41 basis points to 4.632% and reached 4.640%, the highest since May 20.
The yield curve between 2- and 10-year notes US2US10=TWEB flattened to 36.9 basis points.
The Fed held interest rates steady at its June 16-17 meeting, but policymakers signaled they expect to raise borrowing costs later this year amid growing concern that inflation remains lodged above the central bank's 2% target.
The U.S. central bank is expected to hold rates steady again when it wraps up its two-day meeting on July 29, though traders continue to bet on a hike later in the year. Fed funds futures currently show 71% odds of a rate increase by September and an 88% probability of one by year-end.
