Treasury yields moved lower on Tuesday as investors looked to the Federal Reserve's interest rate decision this week.
The yield on the benchmark 10-year Treasury was marginally lower at 4.028%. Last week, the 10-year briefly dipped to 4% after data showed the labor market was weaker than anticipated.
The yield on the 2-year Treasury dropped 2.5 basis points to 3.51, while the 30-year Treasury bond yield shed nearly 1 basis point to 4.648%.
One basis point equals 0.01%, and bond yields and prices move in opposite directions.
Investors are awaiting the outcome of the Federal Reserve's Federal Open Market Committee meeting, which began on Tuesday and will conclude on Wednesday.
Money markets are fully pricing in a 25-basis point cut to the Fed's key interest rate, according to the CME's FedWatch tool. Eyes will be on the central bank's forecast for rates for the rest of the year and whether voting members expect one or two additional rate cuts before the end of the year.
Separately, fresh data Tuesday reflected an increase in August retail sales, which bucked concerns of an economic slowdown as spending grew due partly given lower fuel costs and consumers making purchases before expected tariff increases.
Retail sales rose 0.6% for the month, the same pace as the upwardly revised level for July and better than the Dow Jones estimate for a gain of 0.3%, according to numbers adjusted for seasonality but not inflation. The consumer price index increased 0.4% on the month, indicating that consumers kept ahead of inflation. Excluding autos, sales increased 0.7%, better than the 0.4% forecast and well ahead of the 0.4% pace in July.
"Net, net, the consumer hasn't pulled the plug on the economy yet, and until they do, growth will continue to chug along at a moderate pace that seems to defy gravity in the face of rising tariff costs and store-bought prices," Christopher Rupkey, chief economist at FWDBONDS, said.