By Daniel Kruger 

U.S. government-bond prices fell Monday after the latest signs of progress on a tax-cut package.

The yield on the benchmark 10-year U.S. Treasury note rose to 2.382%, according to Tradeweb, from 2.353% Friday. Bond yields rise as prices fall.

Investors sold bonds and bought stocks after lawmakers Friday released fresh details of the plan, which Republicans hope to pass as soon as Tuesday.

The gap between two- and 10-year Treasury yields continued to narrow, extending a move that has been one of the more persistent trends of the bond market in 2017. The two-year yield, which is more responsive to expectations for Federal Reserve interest-rate policy, has climbed as the central bank has followed through on forecasts for higher borrowing costs. At the same time, the 10-year yield has traded within a narrow range, seldom reaching above 2.4%.

The Fed met its 2017 forecast of three interest-rate increases and has projected three more raises for 2018, and two more for 2019. While inflation has largely held below the central bank's 2% target since 2012, policy makers have said they are moving now to prevent it from gaining a foothold in the economy.

"Everybody's so convinced the Fed is ahead of the curve" of inflation, said Jack Flaherty, a bond manager at GAM Holdings AG, helping suppress gains in long-term yields.

The Fed is forecasting that its preferred measure of prices, personal-consumption expenditures, will rise 1.5% this year, climbing to 1.9% next year and reaching its 2% target in 2019. Those forecasts are unchanged from the Fed's September meeting. Policy makers did raise their growth projections at their meeting last week to 2.5% for this year and next, and 2.1% for 2019, compared with September's estimates of 2.4%, 2.1% and 2%, respectively.

Write to Daniel Kruger at daniel.kruger@wsj.com

(END) Dow Jones Newswires

December 18, 2017 13:53 ET (18:53 GMT)