U.S. Treasury yields surged Monday morning, led by short-term rates, as traders reacted to hotter-than-expected inflation data last week and contemplated a possible recession.The 2-year rate jumped more than 10 basis points to 3.1535%, reaching its highest level since 2007. The benchmark 10-year Treasury yield also rose, last trading at about 3.1762%, with the two edging closer to an inversion — which can often signal a recession. Yields move opposite to the price, and a basis point is equal to 0.01%.Short-term rates have moved more in the last few days because of their higher sensitivity to Federal Reserve rate hikes, flattening the widely watched yield curve.A highly anticipated Federal Reserve meeting comes this week, with the central bank expected to announce at least a half-point rate hike on Wednesday. The Fed has already raised rates twice this year, including a 50-basis-point (0.5 percentage point) increase in May in an effort to stave off the recent inflation surge.Last week, the U.S. consumer price index, a closely watched inflation gauge, rose by 8.6% in May on a year-over-year basis, its fastest increase since 1981, the Bureau of Labor Statistics reported Friday. Economists polled by Dow Jones expected a gain of 8.3%. The so-called core CPI, which strips out volatile food and energy prices, rose 6%.Meanwhile, the University of Michigan consumer sentiment reading fell to a record low, appearing to accelerate the selling in bonds at the end of last week.There are no major economic data releases due Monday.— CNBC’s Jesse Pound and Sam Meredith contributed reporting.