Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.

Investors are focusing on the next monetary policy move from the Federal Reserve, due to be announced Wednesday. Markets are widely anticipating the Fed to cut rates by 25 basis points, in what would be its third consecutive trim.

So far, the Fed has lowered rates by a combined 75 basis points after kicking the easing cycle off with a 50-basis-point cut in September and following up with a 25-basis-point reduction in November.

Investors will also be keeping track of the post-meeting statement, as well as the press conference with Fed Chairman Jerome Powell, which could provide clues into how officials are thinking about monetary policy and the broader state of the economy.

The Fed's latest economic and interest rate projections are also set to be released and will give investors further hints about what could lie ahead in areas such as inflation, unemployment and the gross domestic product.

Traders are anticipating that the central bank will raise its inflation expectations and lower its projections for rate cuts next year.

The Fed's decision comes after the European Central Bank last week cut rates by 25 basis points for the fourth time this year. The Bank of England is set to announce its own rate decision on Thursday.

Back in the U.S., preliminary building permit and housing start figures for November are also due for release on Wednesday.