Bonds

US Treasury yields rise as investors await Fed meeting

Yields on U.S. government debt rose on Tuesday as the Federal Reserve's latest monetary policy meeting began.

The yield on the benchmark 10-year Treasury note was slightly higher at 2.609 percent; the yield on the 30-year Treasury bond was slightly higher at 3.022 percent. Bond yields move inversely to prices.

Treasurys

Market focus is largely attuned to central bank expectations, with the Federal Open Market Committee due to kick-off its two-day policy meeting on Tuesday.

With global economic growth appearing to slow, most market participants anticipate the U.S. central bank to adopt a cautious tone. The Federal Reserve is also expected to lower its interest rate forecasts — or "dot plots" — for the remained of the year.

Market expectations for a rate hike are at zero, according to the CME Group's FedWatch tool. However, investors will look for clues about the central bank's economic outlook.

"We're watching 2.54 percent in 10-year yields with keen interest not only because the level represents the bottom of the range and the lowest print since Jan. 2018, but also in no small part because it's a mere 5 basis points away," Ian Lyngen, head of U.S. rate strategy at BMO Capital Markets, wrote in a note to clients.

"The simple fact that Treasurys are within striking distance of such a pivotal level as the FOMC convenes to craft a message reiterating patience is telling of investors' expectations for Powell to essentially dovishly double-down," he added.

The Fed said in its prior meeting that it will be "patient" and data-dependent when deciding whether to raise rates going forward.

In a separate release earlier this year, Federal Open Market Committee members also mentioned the reduction to the central bank's balance sheet. The committee issued a separate three-paragraph statement noting that "it is appropriate at this time to provide additional information regarding its plans to implement monetary policy over the long run."

Investors are also monitoring developments out of Europe. Fresh Brexit uncertainty dragged U.K. sterling to as low as $1.3183 overnight. It comes after the speaker of Parliament ruled that British Prime Minister Theresa May could not put her divorce deal to a new vote unless it was re-submitted in a substantially different form.

May only has two days to secure approval for her deal to leave the European Union if she wants to meet with the bloc's leaders on Thursday with something to offer them in exchange for more time.

On the data front, January factory orders numbers are due at 10:00 a.m. ET.

- CNBC's Sam Meredith and Spriha Srivastava contributed to this report.