MUMBAI - Indian government bond yields ended marginally higher on Monday, tracking the relentless rise in U.S. yields on the back of rising bets for another rate hike by the Federal Reserve.

The 10-year benchmark 7.26% 2033 bond yield ended at 7.0302%, after closing at 7.0081% in the previous session.

"Indian bonds yields are closely tracking U.S. Treasuries and this trend should continue for the next few sessions," said Debendra Kumar Dash, senior vice president, treasury, at AU Small Finance Bank.

U.S. yields rose further on expectations the Fed will hike interest rates again, either in June or July, after consumer spending data showed annual inflation rose slightly last month.

The personal consumption expenditures (PCE) price index, excluding food and energy, increased 4.7% on-year after gaining 4.6% the prior month. The Fed closely tracks PCE, a major gauge for inflation.

The 10-year U.S. yield was at 3.82% and rose 13 basis points (bps) last week, after rising 23 bps the previous week. The two-year yield, considered a closer indicator of interest rate expectations, was at 4.59%, up 30 bps last week, following a 29-bps jump in the week ended May 19.

Meanwhile, U.S. President Joe Biden and top congressional Republican Kevin McCarthy have reached a tentative deal to suspend the $31.4 trillion debt ceiling until Jan. 1, 2025, which will also be a key trigger for debt markets.

This development, along with the PCE data, has pushed the odds of another 25-bps hike on June 14 to 60%, up from 40% last week and nearly 5% at the beginning of May.

Back home, markets await the release of India's growth data for January-March and the previous financial year. A Reuters poll of economists predicted the reading at 5% on-year, up from 4.4% in October-December.

The data could also provide some indication of how the Reserve Bank of India could react at its monetary policy meeting next week.

(Reporting by Dharamraj Dhutia; Editing by Savio D'Souza)