The yield on the benchmark U.S. two-year note hit its highest level since 2008 on Tuesday amid signs of a stronger economy and a slew of inflation data later this week.
The two-year Treasury rate was last seen at 2.744 percent, its highest level since July 2008.
The yield on the benchmark 10-year Treasury note was higher at 2.974 percent at 1:00 p.m. ET, while the yield on the 30-year Treasury bond was up at 3.117 percent. Bond yields move inversely to prices.
Treasurys
Investors around the globe continue to show signs of cautiousness amid trade and political developments.
Last Friday, President Donald Trump said he was "ready to go" on hitting China with an additional $267 billion worth of tariffs. The U.S. administration had already previously announced that it would impose tariffs on $200 billion in Chinese goods, which continues to be in focus after a public comment period recently expired.
China is reportedly set to call upon the World Trade Organization soon for authorization to inflict sanctions on the U.S., according to a meeting agenda, Reuters reported. The reason for this is because of Washington's non-compliance with a ruling in a dispute over U.S. dumping duties that China introduced in 2013.
Elsewhere, North Korea has come back onto the agenda, after news emerged that Trump had received what The White House dubbed a "very warm, very positive letter" from Kim Jong Un, who called for a follow-up meeting with the U.S. president. Earlier this year, both leaders met in Singapore to discuss denuclearization and the future of the two nations' relationship.
U.S. small business optimism surged to a record in August as President Donald Trump's tax cuts and deregulation initiatives led to more sales, hiring and investment, according to the National Federation of Independent Business.
The NFIB Small Business Optimism Index hit 108.8 last month, the highest level ever marked in the survey's 45-year history and topping the previous record set in 1983, the second year of Ronald Reagan's presidency.
Critical producer price and consumer price data are scheduled for release Wednesday and Thursday, respectively.
The Treasury Department auctioned $35 billion in three-year notes at a high yield of 2.821 percent. The bid-to-cover ratio, an indicator of demand, was 2.68. Indirect bidders, which include major central banks, were awarded 46.3 percent. Direct bidders, which includes domestic money managers, bought 10.7 percent.
—CNBC's John Melloy contributed to this report.