As traders evaluate the likelihood of interest rate cuts, treasury yields increase.

On Monday, U.S. Treasury bond yields increased, aligning with remarks from Minneapolis Federal Reserve President Neel Kashkari that the central bank might not reduce rates until December.

The yield was trading at 4.289%, while the note yield increased by around 6 basis points to 4.744%.

Prices and yields move in opposite directions. A basis point is equivalent to 0.01%.

Kashkari stated in an interview with CBS News on Sunday that it is a "reasonable prediction" that the Fed will not cut interest rates until December. He added that more evidence is required to convince the Fed that inflation will decrease to 2%.

"According to Kashkari, the decision will depend on the data. Currently, the economy is in a good position, allowing for more time to gather inflation, economic, and labor market data before making any decisions. However, if the median indicates a single cut, it is likely to occur at the end of the year."

Last week, the producer price index came in lower than expected for May, boosting hopes of a Fed rate cut and sending Treasury yields lower. However, the central bank opted to hold rates steady at 5.25% to 5.50% and indicated that only one rate cut would take place this year.

This week, we will receive key data such as May retail sales figures, which will be released on Tuesday. Additionally, home sales and housing starts data will become available later in the week.

The U.S. observes a short week due to the closure of markets on Wednesday for Juneteenth.