WASHINGTON (dpa-AFX) - After showing a strong move to the upside in the previous session, treasuries gave back some ground during trading on Tuesday.
Bond prices climbed well off their worst levels in afternoon trading but still finished the day modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.3 basis points to 4.551 percent.
With the increase, the ten-year yield rebounded after ending the previous session at its lowest closing level in over a month.
The pullback by treasuries came as traders cashed in on yesterday's rally ahead of the Federal Reserve's monetary policy announcement on Wednesday.
The Fed is almost universally expected to leave interest rates unchanged, but traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.
Recent economic data has led to concerns about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.
CME Group's FedWatch Tool is currently indicating a 74.5 percent chance rates will be lower by at least a quarter point following the Fed's June meeting.
In U.S. economic news, a report released by the Commerce Department unexpectedly showed a steep drop by new orders for U.S. manufactured durable goods in the month of December amid a nosedive by orders for transportation equipment.
The Commerce Department said durable goods orders plunged by 2.2 percent in December after tumbling by a revised 2.0 percent in November.
Economists had expected durable goods orders to climb by 0.8 percent compared to the 1.2 percent slump that had been reported for the previous month.
However, excluding the steep drop by orders for transportation equipment, durable goods orders rose by 0.3 percent in December after edging down by 0.2 percent in November. Ex-transportation orders were expected to increase by 0.4 percent.
The Conference Board also released a report showing its U.S. consumer confidence index decreased from a notably upwardly revised level in January.
The report said the consumer confidence index slid to 104.1 in January from an upwardly revised 109.5 in December.
Economists had expected the consumer confidence index to climb to 106.3 from the 104.7 originally reported for the previous month.
Early trading on Wednesday may be somewhat subdued as traders look ahead to the Fed's monetary policy announcement in the afternoon.
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