Bonds traded flat on Tuesday after the U.S. government's auction of three-year Treasury notes, the first of three debt auctions this week.
The Treasury Department auctioned $24 billion in three-year notes at a high yield of 0.865 percent. The bid-to-cover ratio, an indicator of demand, was 3.25, compared to a recent average of 3.28.
Indirect bidders, which include major central banks, were awarded 49.4 percent, above the 40 percent average. Direct bidders, which includes domestic money managers, brought 11.1 percent, versus a recent average of 14 percent.
In afternoon trading, U.S. 10-year Treasury yields were up flat at 1.89 percent, while U.S. three-year note yields rose 2 basis points to 0.832 percent.
"The market has come to a point where it's comfortable understanding where the Federal Reserve is headed, that they are truly meaning what they say, which is they are data-dependent," said George Goncalves, head of U.S. rates strategy at Nomura Securities International in New York.
"And as long as data is weak, there's nothing more they can add to the discussion."
Minneapolis Fed President Narayana Kocherlakota, who is not a voting member of the Federal Open Market Committee, echoed the U.S. central bank's dovish stance on Tuesday. He said the Fed could afford to wait until well into next year to raise interest rates with the U.S. economy still years away from rising to normal levels of inflation and employment.
The Treasurys market reacted little to Kocherlakota's remarks.
U.S. 30-year Treasurys yields, meanwhile, fell 2 basis points to 2.25. On Monday, U.S. 30-year prices fell more than a point.
"We're going to see this ratcheting up of the curve, but it won't be a straight line, and when yields cheapen on the back end, people take advantage," said Nomura's Goncalves. "This low grind higher in rates will be met by buyers who missed out in the last rally."
Expectations that the Fed might delay raising interest rates to September, if not next year, could underpin the auction at the margin, said Action Economics. Demand from indirect bidders, which are major central banks, should be decent, given negative yields on many shorter-dated European and some Asian sovereign notes, the research firm added.