MUMBAI, Sept 16 (Reuters) - Indian government bond

yields declined for the fourth consecutive session on Monday, as

bets of a bigger rate cut from the U.S. Federal Reserve later

this week further powered the bulls.

The benchmark 10-year yield ended at 6.7613%,

its lowest since Feb. 25 2022 and less than its previous close

of 6.7904%.

A scheduled debt market holiday was shifted to Wednesday

which impacted volumes across the debt and swap markets.

"We assume that the Fed will favour a strategy of starting

with a 25 bps cut, with openness to accelerate the pace in case

that is required. We anticipate the fresh dot plot will likely

reveal an inclination to reach closer to the neutral rate by

end-2025," ICICI Securities Primary Dealership said in a note.

U.S. yields stayed lower, with the 10-year yield

below the 3.65% mark, as the possibility of a supersized cut

gained ground.

The probability of a 50-basis-point move has more than

quadrupled to 60% from just 14% last week, with a total of 119

bps in cuts now expected in 2024.

The Fed decision is due on Wednesday and will include its

updated economic projections, the dot plot and commentary from

Chair Jerome Powell.

Local sentiment also got some support from the Reserve Bank

of India cancelling treasury bill auctions worth 400 billion

Indian rupees ($4.77 billion) which were due in September.

The yields on such papers dropped to their lowest in nearly

a year and a half, with the market anticipating lower supply in

the upcoming quarter.

Traders also await fresh debt supply as New Delhi will sell

bonds worth 310 billion rupees, which includes 200 billion

rupees of benchmark note on Friday.

($1 = 83.8520 Indian rupees)