(Bloomberg) -- A rally in Treasuries that’s delivered the longest streak of gains for benchmark 10-year debt since August paused on Wednesday ahead of another chunky auction of securities. 

Yields for all maturities rose as much as 3 basis points as of 9:55 a.m. in New York. The US government is set to sell $42 billion of new 10-year notes at 1 p.m. and $25 billion of 30-year bonds on Thursday. While investors often seek higher yields to absorb additional bond issuance, a sale of three-year securities on Tuesday received solid demand despite rallying beforehand, and yields remained lower on the day afterward.

The current 10-year note’s yield has declined for five straight days to about 4.49%, extending its retreat from year-to-date highs over 4.7%. Mounting expectations the Federal Reserve will cut interest rates this year — based on comments last week by Fed Chair Jerome Powell and weak April jobs data — prompted a wave of buying, including short-covering by traders axing bets that benefit from higher yields.

“For the most part, yields are going to hover around 4.5% until we have confirmation on the data front,” Subadra Rajappa, head of US rates strategy at Societe Generale, said on Bloomberg Television. 

Wednesday’s auction at $42 billion matches February’s as the largest 10-year new issue on record. A new 10-year note comes out once per quarter and is expanded over the following two months via reopenings. 

Except for inflation-protected securities, Treasury auctions during the May-to-July financing quarter, whose sizes were announced last week, are unchanged from the previous period, following a series of increases. 

That may support the sale, along with yields still near the highest levels of the year. But whether inflation trends will allow the Fed to begin rate cuts this year remains a risk. Morgan Stanley on Tuesday became the latest Wall Street bank to project a later start than previously anticipated.

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