Treasury yields edge higher as holiday-shortened week starts

U.S. Treasury yields ticked up on Monday as investors prepared for the holiday-shortened week which includes a number of major note auctions.

The 10-year Treasury yield — the benchmark for U.S. government borrowing — was up by more than 1 basis point, reaching 4.165%. The yield on the 2-year Treasury note rose by less than a basis point to 3.492%. The 30-year bond yield, meanwhile, gained more than a basis point to 4.846%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

The Treasury will hold a number of key debt auctions this week, which will provide a partial snapshot of investor positioning and sentiment regarding U.S. debt, inflation and interest rate trends heading into 2026.

The 2-year note auction, which is sized at $69 billion, will take place later on Monday, followed by a 5-year T-Note auction for $70 billion on Tuesday, and a $44 billion 7-year auction on Wednesday.

The sales come after the Bureau of Labor Statistics’ consumer price index rose at a 2.7% annualized rate last month, suggesting inflationary pressures are continuing to ease, though expectations for a January interest rate cut remain low.

Federal Reserve Bank of Cleveland President Beth Hammack said Sunday that interest rates should be maintained at their current level for months, adding that she believes inflation concerns outweigh labor market weakness.

Separately, the Federal Reserve Bank of Chicago is due to publish its national activity index Monday.

The Chicago Fed National Activity Index, which measures U.S. economic activity and related inflationary pressure, is expected to come in at -0.4, up from its previous reading of -0.12 in August. The CFNAI is a weighted average index comprised of 85 monthly economic activity indicators.

Bond markets will close early at 2:00 p.m. on Wednesday and will be closed Thursday for Christmas Day.