Investors are cooling to U.S. Treasuries as they get ready for the return of inflation. Yields on 10-year Treasuries moved up to their highest level in more than four months, with investors expecting demand for government debt to decline as the economy recovers. David Greenlaw, chief fixed-income economist at Morgan Stanley, said benchmark 10-year notes will climb to 5.5%. That will drive interest rates on 30-year fixed-rate home mortgages to 7.5% to 8%, close to their highest level in a decade, Greenlaw said.

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