The yield on the benchmark 10-year Treasury note fell below 2% on Tuesday as investors looked for safety following the release of much weaker-than-expected confidence data.
Short-term rates rose off their lows, however, following comments from St. Louis Federal Reserve Bank President James Bullard and Chairman Jerome Powell.
The yield traded at 1.994% as of 3:33 p.m. ET. The 2-year rate held steady at 1.736% while the 30-year bond yield declined to 2.52%.
Bullard said Tuesday he doesn't believe the U.S. central bank needs to lower borrowing costs by 50 basis points at its next meeting despite his push to cut rates last week.
"Just sitting here today, I think 50 basis points would be overdone," Bullard told Bloomberg News. "I don't think the situation really calls for that, but I would be willing to go 25 (basis points)."
In a speech in New York, Powell reiterated that inflation — or how much prices rise throughout the economy — continues to run below the central bank's 2% objective.
"The crosscurrents have reemerged, with apparent progress on trade turning to greater uncertainty and with incoming data raising renewed concerns about the strength of the global economy. Our contacts in business and agriculture report heightened concerns over trade developments," he said at the Council on Foreign Relations.
The central bank leader also said in prepared remarks that the Fed "is insulated from short-term political pressures — what is often referred to as our 'independence.'"
"Congress chose to insulate the Fed this way because it had seen the damage that often arises when policy bends to short-term political interests. Central banks in major democracies around the world have similar independence," he added.
Those comments may allude to President Donald Trump's recent attacks on the Fed and its monetary policies, which he believes are preventing stronger economic growth and keeping a lid on the stock market. Trump has also said the central bank's interest rate strategy undermines the administration's negotiating position in trade deliberations with China.
The Conference Board's consumer confidence index fell to 121.5 in June, reaching its lowest level since September 2017. Conference Board senior director Lynn Franco said escalating trade fears appear to have "shaken consumers' confidence."
"Those survey readings of higher consumer confidence were just a lot of hot air as it turns out," Chris Rupkey, chief financial economist at MUFG, said in a note. "If the Fed had had this almost ten point drop in the confidence number last week it may well have tipped the scale and led them to cut interest rates."
— CNBC's Silvia Amaro, Fred Imbert and Patti Domm contributed reporting.