U.S. Treasury yields move lower after weak housing data

U.S. Treasury yields fell on Tuesday as investors digested more economic data and continued to weigh the inflationary backdrop ahead of the Federal Reserve's interest rate decision next week.

The benchmark 10-year Treasury yield was down more than 4 basis points at 5.092%, while the 30-year Treasury bond fell more than 5 basis points to 5.415%. Meanwhile, the 2-year Treasury note yield was down 1 basis point at 4.751%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

Yields moved lower after housing starts for September missed expectations, coming in at 1.22 million versus the 1.3 million that economists polled by Dow Jones called for. The latest figure marked a 5.2% decrease from August's revised estimate.

Investors are awaiting other economic data releases this week, including Thursday's release of weekly initial jobless claims.

Investors are anticipating the Fed's next interest rate decision, due next week. The latest figures for the Fed's preferred inflation gauge, the personal consumption expenditures index, will also be released.

Traders are now pricing in an 82% chance of the Fed holding interest rates steady, according to the CME FedWatch Tool. That's up from 42.4% a month ago.