As investors weigh the inflation outlook, treasury yields increase.

On Monday, U.S. Treasury yields increased due to investors' evaluation of the economy and inflation forecast following the latest crucial data release.

Nearly 3 basis points higher, the yield reached 3.777% at 6:37 a.m. ET. The yield had previously decreased by more than 4 basis points to 3.612%.

Prices and yields move in opposite directions, with one basis point equal to 0.01%.

The state of the economy, including the future of inflation and its impact on interest rates, was being evaluated by investors following the release of crucial data.

The Federal Reserve's preferred inflation gauge, the latest personal expenditure price index, was released on Friday, showing a 0.1% month-over-month increase in August. This figure was in line with the forecast from economists surveyed by Dow Jones.

The 12-month inflation rate decreased to 2.2% in August, marking a decline from 2.5% in July and the lowest rate since February 2021.

The core PCE, excluding volatile food and energy costs, increased by 0.1% from the previous month and 2.7% yearly, as anticipated.

The focus of investor attention has shifted back to the economy's state and whether it is easing, following the Fed's decision to cut interest rates earlier this month.

Fresh manufacturing and services PMI readings, along with the latest job openings figures and the September jobs report, which includes non-farm payroll and unemployment data, will provide investors with more clues about the economy's performance in the week ahead.

Various Fed policymakers including Chairman Jerome Powell are also set to make remarks.