The Republican-controlled US House of Representatives was expected to give final approval to a sweeping tax bill on Wednesday and send it to President Donald Trump to sign into law, sealing his first major legislative victory in office.

Many investors expect that tax cuts will help spur investment and spending that will boost the economy and increase stubbornly low inflation.

"The tax reform is really what's been driving yields as well as risky assets over the last few trading sessions," said Subadra Rajappa, head of US rates strategy at Societe Generale in New York. Also, "we've seen strong data, so that typically tends to cause a selloff."

Yields rose on Monday after domestic home construction

unexpectedly accelerated to a 13-month high in November, supporting the view of a solid pace of economic expansion in the fourth quarter.

Benchmark 10-year notes were last down 6/32 in price to yield 2.483 percent, up from 2.463 percent on Monday. The yields earlier rose to 2.497 percent, the highest since March 21.

The yield curve between two-year and 10-year notes also steepened as high as 63 basis points, the steepest level since Nov. 30 as longer-dated notes underperformed on growth optimism and as some traders unwound positions that had been betting on further flattening.

"There's been something of a positional stop-out in the flattening trade that's been reasonably popular in the past few weeks," said Ian Lyngen, head of US rates strategy at BMO Capital Markets in New York.