By Daniel Kruger

The yield on the benchmark 10-year Treasury note snapped two days of declines, rising to 2.904% from 2.877% Friday.

Yields rise as bond prices fall.

The Treasury is selling $151 billion of short-term bills to help manage its cash flow as the government sends out tax refunds and awaits payments, which tend to come in closer to the April 15 filing deadline. And the government is raising the size of its bond and note offerings to finance $1.5 trillion in tax cuts over the next 10 years. which were enacted in December.

With little new data this week, the decline in prices "is very likely supply-related," said Thomas Simons, a money market economist at Jefferies Group LLC. With yields rising, "people are looking at a 3% yield on 10-year notes as something to keep an eye on."

Tuesday's offering of $28 billion of two-year notes was sold at a yield of 2.255%, the highest at an auction of that maturity since August 2008.

Investors and analysts will be looking for signals of whether Federal Reserve officials are becoming more concerned about the pace of inflation on Wednesday, when the central bank releases the minutes of its meeting that ended Feb. 1. Inflation represents a threat to the value of a bond by eroding the purchasing power its fixed coupons.

At their December meeting, Fed officials forecast three interest-rate increases for 2018. Some economists, including those at JPMorgan Chase & Co., have said they expect policy makers will raise rates four times to help limit the pace of price increases as the economy remains robust and unemployment has remained steady at 4.1%.

The consumer-price index rose 2.1% during the 12 months ending in January, according to the Labor Department. Producer prices also rose, as did average hourly earnings, which climbed 2.9% in January, suggesting that a tight labor market is finally starting to lead employers to boost wages.

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

(END) Dow Jones Newswires

February 20, 2018 16:18 ET (21:18 GMT)

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