• The Federal Open Market Committee is scheduled to meet on March 16 and 17.
• Bonds investors will be keeping an eye on whether the Fed alters its interest rate outlook.

U.S. Treasury yields fell on Monday morning, but the 10-year held above the 1.6% mark ahead of the Federal Reserve meeting later this week.

The yield on the benchmark 10-year Treasury note fell to 1.604% in afternoon trading. The yield on the 30-year Treasury bond dipped to 2.355%. Yields move inversely to prices.

The Federal Open Market Committee is scheduled to meet on March 16 and 17. The Fed is expected to forecast better economic growth, following the signing of the $1.9 trillion coronavirus fiscal relief package last week.

Bonds investors will also be keeping an eye on whether the Fed alters its interest rate outlook, with its decision on rates due to be announced Wednesday after the FOMC meeting.

The New York Empire State Manufacturing Index climbed to 17.4 for March, with the New York Fed saying in a report that "business activity grew at a solid clip in New York State."

Data for foreign investment from the Treasury Department showed a net inflow of $106.3 billion in acquisitions of long term securities, short term securities and banking flows in January.

Auctions were held Monday for $57 billion of 13-week bills and $54 billion of 26-week bills.

— CNBC's Maggie Fitzgerald and Jesse Pound contributed to this report.