"I think the markets would like the Fed to hike this week just to take away the uncertainty, but they (markets) are pricing in a low probability (of a move) this week," Steve Cook, co-head of emerging markets fixed income at PineBridge Investments told CNBC's "Squawk Box Europe" on Monday.
The yield on the benchmark 10-year Treasury bond was trading at 2.179 percent—little changed from where it traded in New York on Friday.
Read MoreRising interest rates: What you need to know
The two-year yield, which tends to be sensitive to interest rate moves, rose about 3 basis points to at 0.74 percent. A bond's price and yield move in the opposite direction.
Read MoreFed's move on rates still a close call
Major U.S. stock indexes fell about 0.6 percent in midday trading, while crude prices tumbled more than 2 percent. European and Asian shares closed mixed.
There's little in the way of major U.S. economic news on the calendar this session.
Tuesday sees the release of August retail sales and industrial output numbers, providing the latest clues on the health of the economy ahead of the Fed meeting.