Treasury Yields Near 5% as Inflation Fears Intensify Ahead of Fed Decision

The 10-year Treasury yield is nearing the key psychological level of 5% ahead of this week's Federal Reserve meeting, where the U.S. central bank is expected to raise interest rates.

U.S. consumer prices accelerated in August, with data showing a rise in inflation that has boosted bets on a Fed rate hike to stem inflation above its 2% annual target.

Tom di Galoma, managing director at Mischler Financial, said the acceleration of inflation was 'probably the nail in the coffin' for those expecting no rate increase.

The 2-year note yield rose 0.54 basis points to 4.649%, while the yield on benchmark U.S. 10-year notes increased by 0.84 basis points to 4.983%.