Treasury yields mixed as investors brace for Fed meeting

US Treasury yields struggled to find their bearings on Monday morning as investors braced for the Federal Reserve’s latest policy meeting.

The yield on the benchmark 10-year Treasury note was little changed, trading at 1.7475% at 3:30 a.m. ET. The 30-year Treasury yield fell less than a basis point to 2.0602%. Yields move inversely to prices and 1 basis point equals 0.01%.

The Fed’s two-day policy meeting in January is due to start on Tuesday. Investors will be looking for clues as to how big the central bank will raise interest rates this year and when it will begin.

Goldman Sachs said Sunday its baseline forecast called for four rate hikes this year, but the bank sees a risk of further rate hikes due to soaring inflation.

Holger Schmieding, chief economist at Berenberg, told CNBC’s “Squawk Box Europe” that the investment bank also expects four rate hikes, of 25 basis points, this year.

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However, Schmieding added that Berenberg thought there was a “risk of it being five, but in the context of very strong nominal and real demand in the United States.”

“Even these rate hikes would only dampen the very strong momentum in the US economy a bit, but they would not derail the US economic recovery,” he said.

Markit is due to release its Flash Purchasing Managers Index at 9:45 a.m. ET on Monday.

Auctions are scheduled to take place on Monday for $60 billion in 13-week bills, $51 billion in 26-week bills and $54 billion in two-year bills.

CNBC’s Yun Li contributed to this market report.

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