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Treasury yields tick higher as traders anticipate the Fed’s next move

Treasury yields ticked higher early Monday as traders anticipated the next move by the US Federal Reserve in light of continued high inflation.

The yield on the 2-year Treasury bond rose 1 basis point to 3.8713% at 2:45 am ET. It comes after yields climbed above 3.9% last week, a level last seen in November 2007.

The 10-year Treasury yield, on the other hand, was less than a basis point higher at 3.4554%. Revenue moves opposite to prices. One basis point corresponds to 0.01%.

Read:Bank of England calls for crackdown on money managers after mini-Budget pensions crisis

The Fed’s two-day meeting begins Tuesday, with most market participants expecting another 75 basis point hike from the central bank. However, some analysts have argued that the Fed could raise interest rates by a full point or 100 basis points.

It comes after inflation rose more than expected in August. The consumer price index rose 0.1% for the month and 8.3% over the past year – higher than economists had expected. The data has led investors to expect the Fed to double down on higher interest rates for longer, until prices fall.

Read:Energy prepayment meter customers should start to receive £66 bill discount this week

An auction of treasury bills with maturities of 13 and 26 weeks will take place on Monday. No major data releases are planned.

— Jeff Cox and Jesse Pound of CNBC contributed to this report

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