MUMBAI, Dec 17 (Reuters) - Indian government bond yields

rose on Tuesday, with the benchmark yield inching above the key

6.75% level, after the rupee fell to yet another record low and

as investors braced for the Federal Reserve's monetary policy

meeting.

The 10-year yield ended at 6.7588%, compared

with its previous close of 6.7430%.

"There is some caution ahead of the Fed decision tomorrow.

Also, the constant decline in the local currency is hurting

overall investor sentiment," said Gopal Tripathi, head of

treasury and capital markets at Jana Small Finance Bank.

The Indian rupee fell to another lifetime low on Tuesday,

ending at 84.8950 versus the U.S. dollar, amid worries over a

widening of the domestic trade deficit to a record level in

November.

While the Fed is widely expected to cut interest rates by

25 basis points (bps) on Wednesday, markets fear cautious

commentary from the central bank and an uncertain rate cut

outlook going into 2025.

The Fed is likely to signal it is in no rush to lower rates

further as inflation remains above its 2% target and as the

labour market remains resilient, analysts said.

The odds of a quarter-point cut this week are at over 97%,

but the chances of a reduction in January are just around 17%,

according to the CME FedWatch Tool.

In India, traders await the minutes of the central bank's

December monetary policy meeting. The minutes, which are due on

Friday, could provide clarity on policymakers' thinking about

the domestic interest rate outlook.

The Reserve Bank of India (RBI) had held rates steady

earlier this month while infusing liquidity into the banking

system through a 50-bp cut in lenders' cash reserve ratio.