Fed Decision Looms as Treasury Yields Hold Near Multi-Year Highs

U.S. Treasury yields held steady near multi-year highs on Monday morning as investors waited for the Federal Reserve's monetary policy decision this week.

The benchmark yield consolidated at 4.978%, just below the psychologically significant 5% threshold, after briefly breaching it on Friday.

The long-bond yield also consolidated at 5.353%, with traders weighing inflation risk premia against fiscal deficit supply pressures.

The 2-year note has been particularly sensitive to near-term Federal Reserve policy expectations, surging in recent sessions as investors priced out an autumn policy pause and built in aggressive expectations for interest rate hikes.