(Adds quotes, updates prices)
* Fed meeting minutes on Wednesday in focus
* Treasury yield curve flattest since late 2007
* Trading expected to be light before Thanksgiving
NEW YORK, Nov 20 (Reuters) - U.S. Treasury yields rose on Monday as investors awaited minutes on Wednesday from the Feds last meeting, with no major economic releases due this week and trading expected to be subdued before the Thanksgiving holiday on Thursday. The U.S. central bank kept interest rates unchanged when it concluded its two-day meeting on Nov. 1 and pointed to solid U.S. economic growth and a strengthening labor market while playing down the impact of recent hurricanes. The Feds meeting minutes will be evaluated for any new indications that a rate hike is likely in December. "The highlight of the week should be the minutes on Wednesday," said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York. Interest rate futures traders are pricing in a 92 percent chance of a December rate hike, according to the CME Groups FedWatch Tool.
Benchmark 10-year notes fell 5/32 in price to
yield 2.37 percent, up from 2.35 percent on Friday. The yield curve between two-year and 10-year notes also continued to flatten to 61 basis points, the lowest level since late 2007. The yield curve has flattened as investors price in the expectation that the Fed will continue to raise rates while the U.S. Treasury is expected to increase debt issuance with a focus on short- and intermediate-dated maturities. "The flattening that weve seen over the last couple of months is a long-term trend move, its the idea that the Fed is going to continue to raise rates," said Thomas Simons, a money market economist at Jefferies in New York. At the same time, low inflation and global demand for yield has supported longer-dated debt. "We still have a relatively low inflation environment and we have global investors that are still looking at our curve as presenting relative value," Simons said. Yields briefly fell earlier on Monday in line with German government debt after German Chancellor Angela Merkel said her efforts to form a three-way coalition government had failed. The development put Germany into its worst political crisis for decades, raising the prospect of fresh elections and casting doubt over Merkel's future.
(Editing by Lisa Shumaker)