Yields Hold Near Multi-Year Highs Ahead of Crucial Fed Decision

U.S. Treasury yields hovered near multi-year highs on Monday morning as investors braced for a crucial Federal Reserve monetary policy decision.

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

The long-bond yield similarly consolidated at 5.353%, as traders weighed long-term inflation risk premia against fiscal deficit supply pressures.

Market expectations suggest an 86% probability of a 25 basis point rate hike by the Fed at its September meeting, with some analysts predicting a follow-up increase in December.