Treasuries showed some initial weakness but eventually regained ground, only to move downward once more over the course of Monday's trading day.
Late in the trading session, bond prices came under increased pressure, closing decisively in negative territory. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, rose by 5.3 basis points to 3.802 percent.
The downturn in Treasuries followed comments from Federal Reserve Chair Jerome Powell at the annual meeting of the National Association for Business Economics. Powell indicated that the central bank could continue lowering interest rates, although he emphasized that the path for rate reductions is not predetermined.
Powell stated that the Fed's decision to cut rates by half a percentage point earlier in the month was driven by growing confidence that an appropriate adjustment of monetary policy would sustain labor market strength and ensure inflation trends back toward the 2 percent target.
"Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance," Powell remarked. "But we are not on any preset course. The risks are two-sided, and we will continue to make our decisions meeting by meeting," he added.
Powell’s comments partially tempered expectations that the Fed would aggressively lower interest rates in the upcoming months.
The Federal Reserve's next monetary policy meeting is set for November 6-7. According to CME Group's FedWatch Tool, there is currently a 65.3 percent probability that the central bank will reduce rates by 25 basis points and a 34.7 percent likelihood of a further 50 basis point cut.
Looking ahead, Tuesday's trading may be influenced by reactions to reports on manufacturing sector activity and job openings.