Short-term U.S. Treasury yields continued to rise Thursday as investors weighed the prospect of larger rate hikes from the Federal Reserve at its meeting next week.The yield on the 2-year Treasury, which is among those most affected by Fed decisions, rose 4 basis points to 3.823%, its highest level since 2007. It’s risen roughly 25 points since Tuesday.Yields move inversely to prices, and a basis point is equal to 0.01%.Meanwhile, the yield on the benchmark 10-year Treasury note was up just over 3 basis points to 3.445%. The yield on the 30-year Treasury bond was was also trading 3 basis points higher at 3.499%.The moves follow Wednesday’s release of the producer price index, which declined 0.1% in August, a small edge downward from growing inflation pressures, according to the Bureau of Labor Statistics. Excluding food, energy and trade services, core PPI increased 0.2%.The week’s main news however was August’s consumer price index report on Tuesday, which showed inflation rise 0.1% month on month, a higher-than-expected reading which sent markets tumbling in their worst day since mid-2020.Some analysts are are now expecting a full point rate hike from the Fed at its next meeting on Sept. 20-21.According to Brad McMillan, chief investment officer at Commonwealth Financial Network, this week’s CPI data was “terrible” — but there are signs of improvement on the horizon, particularly in Wednesday’s PPI report.”The headline number held steady at 0.2 percent, but the annual number dropped by much more, from 9.8 percent to 8.7 percent (a much bigger drop than the CPI),” he told CNBC. “When you look at the details, things are not so bad,” McMillan added. “The CPI and the market reaction suggest inflation will keep rising at an accelerating rate, but not all of the data agree. Even using much of the data as it stands, it still looks likely inflation will end the year lower than it is now.”Investors will be watching for a raft of data releases Thursday, with figures on retail sales, import and export prices, jobless claims, manufacturing and industrial production, and Energy Information Agency gas stocks set to be published over the course of the day.Four-week and 8-week bills are also due for auction Thursday.— CNBC’s Tanaya Macheel contributed to this report.