NEW YORK (CNNMoney.com) - Bond prices turned slightly lower Monday on continued inflation talk by Federal Reserve officials, furthering expectations that the central bank will raise interest rates when it meets again.

The dollar climbed against the euro and the yen.

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The 10-year note was down 2/32 at 99-27/32, yielding 5.14 percent, up from 5.13 percent late Friday. The benchmark yield continued to remain below the yield on the two-year note, resulting in an inverted yield curve.

Yield curve inversions in the past have been considered possible signs of impending recessions, but that is considered less reliable since the curve has inverted on and off over the past 11 months. Many economists now say an inversion is more a harbinger of slowing economic growth.

The 30-year bond declined 2/32 to 89-25/32, to yield 5.17 percent, slightly higher than the previous session. Bond prices and yields move in opposite directions.

The five-year note was down one tick, yielding 5.12 percent, while the two-year note was relatively unchanged, yielding 5.18 percent.

Treasury prices slipped following a speech by Atlanta Fed President Jack Guynn, who said core inflation may have surpassed its acceptable upper level, echoing hawkish comments earlier this month by several other central bank officials.

In recent weeks, Fed officials have stressed the need to fight inflation, making an interest rate hike at its June 28-29 meeting seem all but inevitable.

"The speeches in general will stay with that hawkish tone until they start to see some potential slowing down in inflation," Adam Brown, director of the Treasury trading desk at Barclays Capital in New York told Reuters. "When possible, they are going to try to show their commitment to fighting inflation if it becomes a problem."

Another rate increase in June would mark the 17th time that the central bank has raised interest rates.

Bonds moved off their lows following a survey by the National Association of Home Builders revealed that U.S. homebuilder sentiment sank to its lowest in more than a decade in June, hurt by rising interest rates and investor restraint. (Full story)

Bond traders will be watching another key real estate reading - May housing starts - due out Tuesday, as well as Friday's durable goods orders report for May. (Full story)

In currency trading, the euro bought $1.2584, down from $1.2639 Friday. The dollar traded at ¥115.43, up from ¥115.13 the previous session.

--from staff and wire reports

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