TREASURIES-US yields tick higher in final week of 2025

(Updates throughout with latest market activity)

By Matt Tracy

Dec 30 (Reuters) - Treasury yields were largely unchanged at midday on Tuesday, as the market looked ahead to January for signs of the U.S. economy's direction.

The yield on 10-year Treasury notes ticked up 1.2 ?basis points to 4.127%.

The yield on the 30-year Treasury bond was last up 0.4 bps ?at 4.808%.

The two-year U.S. Treasury yield, which typically moves in step with ?interest rate expectations, was last down one bp at ?3.454%.

The U.S. dollar ?five-year forward inflation-linked swap , seen by some as a better gauge of inflation expectations due ?to possible distortions caused by the ?Fed's quantitative easing, was last at 2.449%.

Yields ticked higher after Tuesday data showed that home prices in October rose at ?the slowest annual rate in ?more than 13 ?years.

Data on Monday showed pending home sales rose 3.3% last month after an upwardly revised 2.4% gain in October, the National Association ?of Realtors said. Economists polled by Reuters had forecast contracts rising 1%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 67 bps.

Market odds of a cut ?in ?a key interest rate at the Federal Reserve's January meeting were last at 16.1%.

The Fed released minutes from its last December ?FOMC meeting midday on Tuesday.

Market participants are watching closely for any key data points that could point to a rate cut in January. This will likely come in the first month of 2026 with the next major inflation and jobs reports, market participants said.

"There has not been a lame-duck midterm year (like 2026) since ?1950 in which sustained monetary tightening coincided with a favorable market outcome," said Dean Lyulkin, CEO of small business lender Cardiff and founder of The Dean's List, in a written ?note.

(Reporting by Matt Tracy in Washington; Editing by Susan Fenton and Lisa Shumaker)