US Treasury yields edged higher Tuesday after a key inflation gauge showed price pressures remain well above the Federal Reserve's target, sustaining expectations that the central bank may begin raising interest rates by year-end. Two-year yields, which are sensitive to monetary policy expectations, rose about three basis points to 4.21%, while benchmark 10-year yields climbed about two basis points to 4.65%. The market remained steady following an auction of five-year notes that drew yields of 4.393%, slightly above the 4.391% level seen just before the bidding deadline.

The data reinforces the view that inflation has not cooled sufficiently for the Fed to consider rate cuts, keeping the door open for further tightening. Traders continue to price in a higher-for-longer rate environment as policymakers monitor incoming economic reports for signs of sustained disinflation.