Treasury yields rise as Fed rate hike bets rise

US treasury yields advanced on Tuesday as expectations that the Fed may raise interest rates at its June meeting increased after Trump said on Friday that tax cuts would be announced today.

According to CME data, Futures traders are pricing in a 71% probability of a June rate hike, up from 49% last Wednesday.

The 10-year treasury yield rose to 2.345%, the highest level since April 11. The yields hit five-month lows of 2.17% last week ahead of French vote. The risk-on in the markets also reduced the demand for the safe haven Treasuries, pushing the yields higher.

Investors await the sale of $62 billion in new short- and intermediate-dated supply. The Treasury auctioned $26 billion worth of two-year notes on Tuesday.