FXStreet (Mumbai) - The treasury yields in the US have been chasing oil prices since the European session as the sharp moves in the oil prices influence the inflation expectations. 10-year yield completes a lap The 10-yr treasury yield was up almost 3 basis points (bps) in Europe, but quickly erased gains after oil prices extended losses to trade 3% lower. However, the oil prices recovered part of their losses, which saw the yield rise to trade at 2.174%; up 3bps again. Meanwhile, the 2-yr yield, which is more sensitive to the short-term interest expectations and inflation expectations, witnessed similar moves and now trades 4bps higher at 0.935%. The yields may harden as we head closer to Wednesday’s Fed rate decision, but weaker oil prices may play spoil sport. For more information, read our latest forex news.