MUMBAI, Sept 15 (Reuters) - Indian government bond

yields inched up in early deals on Monday, tracking higher U.S.

Treasury yields and oil prices, while the Federal Reserve's

policy decision this week was also on traders' radar.

The yield on the 10-year benchmark was

6.4938% as of 10:30 a.m. IST. It closed at 6.4867% on Friday.

The 10-year U.S. Treasury yield rose about 5 bps to close at

4.06% on Friday, as investors digested weak data that opens the

door for the Fed's first monetary policy easing in nine months.

The benchmark Brent crude futures gained 0.5% to

$67.34 per barrel in Asian hours, rising for a second session.

Traders are cautiously awaiting the Fed's policy decision

and the accompanying commentary by Chair Jerome Powell to gauge

the U.S. interest rate path.

"A 25-basis-point rate cut by the Federal Reserve has

already been priced in, but Powell's commentary will be key amid

a weakening jobs market and Trump's punitive tariffs," a trader

at a private bank said.

"A dovish tone in Powell's remarks will be positive for

Indian bonds."

Indian bond yields have eased since the start of this month,

with the 10-year yield down 8-9 bps, after the government

reaffirmed its commitment to meet its fiscal deficit and

borrowing targets.

Last month, New Delhi's announcement of plans to slash taxes

had stoked fears of fiscal slippage and heavier borrowing. The

final revision in September showed a smaller-than-expected

revenue loss, providing relief to the market.

However, caution prevails as market participants await cues

on the Reserve Bank of India's rate easing trajectory.

"We need some dovish signal from the RBI on its rate easing

plan for yields to lower meaningfully," the trader added.

RATES

India's overnight index swaps were barely changed in early

trading, as traders stayed put ahead of the U.S. Fed's policy

decision.

The one-year OIS rate was at 5.4750% and

the two-year OIS rate was at 5.45%. The liquid

five-year OIS rate was at 5.67%.