U.S. government bond prices held higher on Tuesday, after the Treasury Department auctioned $26 billion in two-year notes at a high yield of 0.699 percent on Tuesday, its highest since December.
The bid-to-cover ratio, an indicator of demand, was 3.27, higher than August's 3.16, but below a recent average of 3.41.
Indirect bidders, which include foreign central banks, were awarded 43.2 percent, the smallest since May, while direct bidders, which include domestic money managers, brought 13.3 percent, the highest since May.
The yield on the benchmark 10-year Treasury was down 6.2 basis points at 2.14 percent after hitting a session low of 2.1135 percent, while 30-year yields were down 7.6 basis points at 2.9484 percent, after hitting a session low of 2.9178 percent. The two-year yield traded down about 4 basis point at 0.6697 percent.
Yields traded lower as bonds recovered some of the previous day's losses made after comments from U.S. Federal Reserve officials suggested a near-term rate rise remains on the cards.
Treasury prices rose last week, pushing yields on short-dated bonds to three-week lows, after the Fed held interest rates at record low levels amid concerns about the outlook for global economic growth.