By William Watts, MarketWatch

Treasury prices extended a weakening trend Tuesday, pushing the 10-year note yield above 3.10% to its highest since May a day ahead of a Fed decision that is expected to deliver the third rate increase of 2018.

The yield on the benchmark 10-year Treasury rose 3.5 basis points to 3.113%, its highest intraday level since May 18 and on track for its highest close since July 2011, according to Dow Jones Market Data. The 2-year yield was up 4.3 basis points to 2.843%, while the 30-year Treasury bond yield climbed 3.6 basis points to 3.247%. Yields and debt prices move in opposite directions.

"The U.S. 10-year yield seems to be gearing up for an attack of this year's high around 3.13%," wrote analysts at KBC Bank, in a note.

The yield rise comes ahead of the conclusion of a two-day meeting of Fed policy makers on Wednesday that is seen as virtually certain to deliver a quarter-point rate increase, bringing the fed-funds rate to a range of 2% to 2.25%. Investors will focus on the Fed's policy statement, forecasts and, in particular, remarks by Fed Chairman Jerome Powell in his news conference.

Read more:Economy keeps pumping, but now the Fed wants to let out some air (http://www.marketwatch.com/story/economy-keeps-pumping-but-now-the-fed-wants-to-let-out-some-air-2018-09-22)

Also:The Powell Fed can make history if it can slow the economy without crashing it (http://www.marketwatch.com/story/the-powell-fed-can-make-history-if-it-can-slow-the-economy-without-crashing-it-2018-09-24)

On the data front, Case-Shiller home price data for July is due at 9 a.m. Eastern, while a September reading on consumer confidence is set to be released at 10 a.m.

The KBC analysts said the data are unlikely to hold much sway over markets in the run-up to the Fed decision, while an auction of $38 billion of five-year Treasury notes could weigh on prices.

Index futures pointed to a positive start for Wall Street stocks (http://www.marketwatch.com/story/stock-futures-slightly-higher-major-indexes-near-records-2018-09-25) a day after an apparentl intensification of trade tensions, with the implementation of additional tariffs by the U.S. on Chinese goods and the threat of retaliatory tariffs by China on U.S. goods and the cancellation of negotiations, weighed on the market.

Knee-jerk reactions aside, stocks have largely brushed off trade worries in 2017, with the Dow Jones Industrial Average and the S&P 500 index trading at records last week.

(END) Dow Jones Newswires

September 25, 2018 07:48 ET (11:48 GMT)