U.S. government bond yields have retreated steadily from their mid-July highs, with the benchmark 10-year note sliding to 4.35% on July 22—below its 200-day moving average—and the two-year yield falling to 3.84%, the lowest level since July 3. The pullback marks a sharp reversal from the 10-year’s four-week high of 4.487% reached on July 15, as investors moved into Treasuries ahead of a busy auction calendar and this week’s Federal Open Market Committee decision. Demand proved resilient when the Treasury sold $69 billion of two-year notes on July 28. The securities cleared at a high yield of 3.92%, roughly half a basis point below the prevailing when-issued level, and attracted a bid-to-cover ratio of 2.62, up from 2.58 at the previous offering. A simultaneous six-month bill sale drew a high yield of 4.12% with a solid 3.36 bid-to-cover, reinforcing appetite for short-dated government debt. The government will test the market further with a $70 billion five-year note auction later Monday and a $44 billion seven-year sale on Tuesday. Traders say participation at the remaining auctions and guidance from the Fed on Wednesday will determine whether the recent rally in Treasuries gathers pace or stalls.