The U.S. 10-year Treasury yield was down slightly in afternoon trading on Tuesday after hitting a 14-month high earlier in the session.
The yield on the benchmark 10-year Treasury note inched lower to 1.714% in afternoon trading. It hit 1.776% earlier in the session, the first time trading around that level in January 2020.
The yield on the 30-year Treasury bond fell more substantially to 2.374%. Yields move inversely to prices.
The move in yields comes a day ahead of President Joe Biden revealing details of his infrastructure plan. The recovery package is expected to include up to $3 trillion in spending across a swathe of sectors in an effort to bolster the U.S. economy.
HSBC strategists said in a note published Monday that "stimulus and any infrastructure plan are likely to prove to be a sugar rush for the economy given the secular headwinds."
Meanwhile, the pace of Covid-19 vaccinations in the U.S. is rising, with the Centers for Disease Control and Prevention reporting that over 3 million doses had been administered for three straight days, as of Sunday. However, coronavirus cases are also rising, with more than 63,000 new daily infections reported in the U.S., based on a seven-day average of Johns Hopkins University data.
The move higher in yields to start the year comes amid increasing talk of inflation, as the U.S. economy starts to bounce back. There were already concerns that the $1.9 trillion stimulus spending package signed earlier this month could stoke rising prices amid the economic recovery from the pandemic.
Unigestion Investment Manager Olivier Marciot said in a note Tuesday that he believes there is a "risk that inflation pressures will be less transitory than expected, increasing the odds of the Fed sitting 'behind the curve' and later being forced to change course more rapidly than projected."
Credit Suisse strategists reiterated Tuesday that they expect the 10-year yield to hit 2% in the second quarter. Meanwhile, a strategist from ING recently told CNBC that he believed the 10-year yield would climb "well above" the 2% level.
On the data front, January's S&P/Case-Shiller home price index showed that real estate prices continue to climb. The Conference Board's consumer confidence index jumped to 109.7 in March, up from 90.4 in the previous month.
An auction was held on Tuesday for $40 billion of 42-day bills.
— CNBC's Nate Rattner contributed to this report.