The 10-year Treasury yield decreases as investors assess the condition of the U.S. economy.

As investors evaluated the economy and monetary policy, U.S. Treasury yields decreased on Tuesday, while awaiting economic data and Federal Reserve officials' comments.

The yield on the decreased by 3 basis points to 4.911%, while the yield on the was 9 basis points lower at 4.573%.

Prices and yields move in opposite directions, with one basis point equal to 0.01%.

This week, although there is limited data, Fed policymakers, including Chair Jerome Powell, will provide comments.

Oanda's senior market analyst, Craig Erlam, stated that policymakers must avoid shifting their messaging based solely on bond yields' performance, as they are largely responsible for the moves, while closely monitoring them.

Despite the Fed leaving interest rates unchanged last week, Powell noted the economy's resilience despite rates being elevated for some time. Powell did not rule out the possibility of further interest rate increases and stated that cuts were not being discussed yet.

Since the publication of jobs data, there is evidence that the labor market is cooling, which has given some investors hope that the central bank has ended the rate-hiking cycle that began in March 2022.

The Fed's central policy aim has been to ease the jobs market along with the overall economy. This week, investors will scrutinize officials' comments to determine if recent figures have influenced their expectations for the policy trajectory.

Societe Generale's Subadra Rajappa stated that while bond yields have decreased in recent sessions, crucial upcoming data may significantly impact the future trend, according to her.

The head of U.S. rate strategy stated that a sustained rally in bonds cannot be called until there is a clear trend of weakness in the data, although she anticipates a gradual decline in the U.S. economy, which may enter a recession in the middle of 2024.