Yields on U.S. Treasuries have jumped by more than 30 basis points this month as investors came to the realization that the Federal Reserve will likely not cut interest rates by the end of the year.

The benchmark 10-year Treasury note yield rose to 5.19 percent in trading this morning. And Adam Donaldson, head of debt research at the Commonwealth Bank of Australia expects U.S. "10-year yields to range from 5.1 percent to 5.5 percent 'with an upward bias' as U.S. growth picks up," reports Bloomberg. "The yield may rise to 5.3 percent by mid-year and 5.4 percent by year end," Bloomberg reports Donaldson as saying.

Strong global growth and the resurgence of inflation have investors abandoning hopes of a Fed rate cut, and instead betting on a rate increase by year end.

According to trading in Fed funds futures options, traders are betting there's a 44 percent chance the Fed will raise rates by the end of the year, compared to a zero percent chance a month ago. In fact, traders were predicting a 58 percent chance of a rate cut last month.

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In addition, economic reports due out this week are expected to show higher inflation and a rebounding economy in the U.S.

According to surveys by Bloomberg, retail sales data due out tomorrow may show a 0.6 percent increase in May, after sliding 0.2 percent in April. And producer prices, which are released on June 14, are expected to show core prices rising 0.2 percent in May, after holding steady in April.

Both would give the Fed reason to either hold rates steady or hike rates when it meets at the end of June, despite the drag the housing market is currently having on the economy.

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