Treasury yields fell slightly on Tuesday as investors monitored Federal Reserve Chairman Jerome Powell's virtual hearing on the state of the economy amid the coronavirus pandemic.
Powell and Treasury Secretary Steven Mnuchin testified before the Senate Banking Committee on Tuesday.
The Fed chair described the coronavirus pandemic as having caused "a level of pain that is hard to capture in words" and calls on Congress to do more to match the Fed's historic stimulus measures. He adds that the central bank is committed to using its "full range of tools" to support the economy.
Data on Tuesday showed U.S. home construction starts posted the worst monthly decline on record in April. Housing starts tumbled 30.17% to a seasonally adjusted annual rate of 891,000 units last month, a five year low, the Commerce Department said on Tuesday.
Yields are stepping back from strong gains on Monday after biotech firm Moderna's closely watched early-stage human trial for a coronavirus vaccine produced Covid-19 antibodies in all 45 participants, sending risk assets surging to six-week highs.
However, investors are also monitoring hopes of a global economic recovery. IMF Managing Director Kristalina Georgieva suggested Monday that the recovery will take much longer than initially expected.
Georgieva said the IMF will likely revise downward its forecast for a 3% contraction in GDP in 2020, with only a partial recovery expected in 2021 instead of the 5.8% rebound previously anticipated.
Auctions will be held for $31 billion of 52-week Treasury bills, $40 billion of 119-day bills and $65 billion of 42-day bills.