U.S. Treasury yields moved lower on Tuesday as investors turned their attention to a series of upcoming government debt auctions, which are expected to shed light on market expectations for inflation and the overall demand for U.S. government bonds.

The yield on the benchmark 10-year Treasury note fell by more than two basis points, settling at around 4.147%. Shorter-term yields also edged down, with the 2-year Treasury yield slipping by less than one basis point to approximately 3.495%. Meanwhile, long-term borrowing costs declined as well, as the yield on the 30-year Treasury bond dropped about two basis points to 4.815%.

In bond markets, a basis point represents one-hundredth of a percentage point. Treasury yields typically move in the opposite direction of bond prices, meaning prices rise when yields fall.

Trading activity is expected to remain lighter than usual this week due to the Christmas holiday. U.S. bond markets will close early at 2:00 p.m. on Wednesday and will be fully closed on Thursday in observance of the holiday.

Despite the shortened trading schedule, the U.S. Treasury is pressing ahead with several significant debt offerings. These auctions are being closely watched by investors, as they may offer clues about how the market is positioning itself ahead of 2026, particularly in terms of expectations for inflation, interest rates, and the government’s borrowing outlook.

Later on Tuesday, the Treasury plans to auction $70 billion worth of 5-year notes. This will be followed on Wednesday by a $44 billion auction of 7-year Treasury notes. Together, these sales are expected to provide a useful snapshot of investor appetite for U.S. debt during a period of economic uncertainty and shifting monetary policy expectations.