US Treasuries ended Tuesday's session mixed, with the yield curve steepening after New York Fed President Williams' remarks during the afternoon US trading hours lifted shorter-dated government debt.

Williams indicated that one more rate increase this year may be an appropriate move to help contain inflation, a statement that fell short of market expectations, and 2-year Treasury yields subsequently dropped to intraday lows.

Longer-dated Treasuries maintained their declines, pushing 30-year yields to their highest level since 2002. A heavy slate of new corporate debt issuance also intensified pressure on the market, including bonds from Paramount Global that are expected to be priced on Wednesday.

Shortly after 3 PM New York time, short-end yields were down roughly 4 basis points on the day, near session lows, while long-end yields rose more than 4 basis points. The 2s10s and 5s30s spreads widened by about 6 basis points and 5 basis points respectively on the day, approaching intraday highs.

In late trading, block trades in 5-year and ultra-long Treasury futures reinforced the curve-steepening trend. Price action indicated that the market bought 5-year Treasury futures and sold ultra-long Treasury futures, executing a steepening trade worth approximately $570,000 per DV01.

Williams' comments caused the Fed rate-hike premium implied by short-end swaps to retreat. As of the close, the market still priced in roughly 13 basis points of tightening for the October meeting, compared with 18 basis points at Monday's close.

Corporate bond issuance added to downward pressure on the long end. Paramount Global plans to raise approximately $32 billion through bond sales, among the largest deals of its kind, with the company intending to issue first-lien dollar-denominated notes split into eight tranches with maturities ranging from 2 to 40 years.

As of 3 PM, US Treasury futures volume was approximately 40% above the 20-day average. In the two minutes following Williams' remarks at 2 PM, roughly 68,000 10-year Treasury futures contracts traded, the largest two-minute volume so far this week.

As of 4:09 PM New York time, the 2-year yield fell 4.4 basis points to 4.8869%; the 5-year yield declined 0.9 basis points to 5.0608%; the 10-year yield rose 1.5 basis points to 5.251%; the 30-year yield climbed 3.9 basis points to 5.5851%; the spread between 5-year and 30-year yields widened by approximately 4.8 basis points to 52.26 basis points; and the spread between 2-year and 10-year yields widened by about 5.9 basis points to 35.99 basis points.