By Sam Goldfarb

U.S. government bond prices fell Tuesday as investors looked forward to the conclusion of the Federal Reserve's meeting on Wednesday and cleared space in their portfolios for a new bond offering from Anheuser-Busch InBev SA.

In recent trading, the yield on the 10-year Treasury note was 2.887%, according to Tradeweb, compared with 2.844% on Monday. Yields rise when bond prices fall.

As often happens in the lead-up to Fed meetings, yields have been trending higher in recent days. Fed officials are widely expected to lift short-term interest rates this week, and some analysts believe they could also raise their number of projected future increases.

"There is the risk that the Fed sounds a little bit more hawkish tomorrow," said Mark Cabana, U.S. rates strategist at Bank of America Merrill Lynch. While BofA Merrill Lynch analysts anticipate that the Fed's median projection of rate increases in 2018 will remain at three, there is a better chance officials could lift their projections for 2019, 2020 and over the longer term, he said.

Adding to the pressure on Treasurys Wednesday, AB InBev was said by investors to be marketing around $5 billion to $7 billion of new bonds, ranging in maturities from five to 40-years.

Hefty corporate-bond sales can sometimes weigh on the Treasurys market as investors raise cash for the new deal by selling liquid securities and try to limit their exposure to interest-rate swings.

Treasury yields have jumped this year partly because investors have grown more concerned that a sustained period of economic growth will finally result in higher inflation, which hurts government bonds by eroding the purchasing power of their fixed payments.

Traders have also become more nervous about the course of monetary policy around the globe as major central banks, such as the European Central Bank, appear close to ending their postcrisis stimulus programs.

After ending 2017 at 2.409%, the 10-year Treasury yield reached a recent closing high of 2.943% on Feb. 21. It has since edged down as investors responded to a run of somewhat lackluster economic data.

Write to Sam Goldfarb at sam.goldfarb@wsj.com

(END) Dow Jones Newswires

March 20, 2018 11:31 ET (15:31 GMT)

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