U.S. Treasurys traded lower after the Treasury Department's two-year notes sale on Tuesday.
The department auctioned $26 billion in two-year notes at a high yield of 0.69 percent, which is slightly under a 0.692 percent average.
The bid-to-cover ratio, an indicator of demand, was 3.42, in line with a recent average.
Indirect bidders, which include major central banks, were awarded 54.4 percent, well above a recent average of 42 percent.
Direct bidders, which include domestic money managers, brought 17.9 percent, slightly higher than a recent average of 15 percent.
The yield on the two-year note slightly extended gains following the auction, trading up 1.6 basis points at 0.67 percent, while the yield on the benchmark 10-year Treasury rose 2.4 basis points to 2.2517 percent. When a bond's yield rises, its price falls.
U.S. Treasury prices were also lower as a note of caution entered the market amid the start of a U.S. Federal Reserve meeting.
The Fed kicked off a two-day meeting and is not expected to unveil any changes to monetary policy on Wednesday. Still, focus is on whether the post-meeting statement will indicate whether the U.S. central bank is gearing up for a September rate hike.