Market watchers expect the 10-year Treasury’s yield to fall to 4.18 percent in a year, from 4.28 percent currently.

Most U.S. stocks are falling on Tuesday after an update on inflation hurt Wall Street's hopes for lower interest rates. Fed Chair Jerome Powell, though, has been adamant that he wants to wait for more data about how tariffs affect the economy and inflation.

The US budget legislation is expected to worsen the country's fiscal outlook without boosting economic growth.

Major stock indexes declined while the dollar strengthened against major currencies on Monday as President Donald Trump unveiled 25% tariffs on goods from Japan and South Korea and investors awaited further announcements in the White House's trade negotiations. Longer-dated US Treasury yields edged higher.