Benchmark U.S. Treasury debt yields slipped but held near highs for the year on Monday as investors readied for less buying of bonds by the Federal Reserve next year, with volumes light as the New Year's Day holiday approaches.

"Today is the day before the last trading day of the year. That's really its claim to fame," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.

"Expectations for significant price action are muted," he added, noting thinly-staffed trading desks.

The pull back reversed some of the advance in yields after the U.S. Federal Reserve earlier this month said it will scale back its monthly purchases of Treasuries and mortgage-backed securities by $10 billion to $75 billion in January as the economy seems to be improving.

The 10-year Treasury note rose 6/32 in price on Monday to yield 2.983 percent, from a yield of 3.006 percent late on Friday.

The 10-year yield, a benchmark for mortgages and other long-term borrowing costs, touched 3.02 percent late last week, the highest intraday level since July 2011, according to Reuters data.

The benchmark note yield has gained about 125 basis points since the end of last year as the world's biggest economy has regained some momentum. Equities have hit a series of record highs as investors have turned away from safe-haven government debt to scoop up riskier assets.

The 30-year Treasury note rose 14/32 in price to yield 3.919 percent, from a yield of 3.945 percent late on Friday.

Nevertheless, the Fed suggested last week that short-term interest rates will stay near zero over the near term because of a combination of a still-uncertain job market as well as benign inflation pressures.

Those price pressures could become a major focus in the coming year, said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee.

"Assuming economic growth improves next year as forecasted, the story for bond investors will be the track of inflation," Vogel said.