The 10-year Treasury yield surges above 4% following a Fed official's statement that rate cuts might not occur immediately.

On Tuesday, Treasury yields increased, marking the beginning of a shortened trading week, following the Fed's indication that it would lower rates at a slower pace than the market had predicted.

The yield on the note increased by nearly 12 basis points to 4.066%, after hovering around the 4% mark for much of last week. The yield then rose by around 10 basis points to trade at 4.228%.

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

Federal Reserve Governor Christopher Waller's comments about the central bank's potential rate cuts this year have led to a jump in yields on Tuesday.

He stated that when the time comes to lower rates, it should be done methodically and carefully, as opposed to cutting rates reactively and quickly as in previous cycles. This cycle, he believes, does not warrant such a rapid or drastic reduction in rates.

Retail sales data for December, to be released on Wednesday, could stoke recessionary fears and economic growth concerns if U.S. consumer spending decreases.

FactSet's polled economists predict a 0.2% increase in the month, which is slightly below the 0.3% increase seen in November.

— CNBC’s Jeff Cox and Pia Singh contributed to this report.