By Joseph Adinolfi, MarketWatch

President Donald Trump will address Congress at 9 p.m. Eastern

Treasury yields were essentially flat on Tuesday, but remained on track to notch their first monthly drop since July, as investors await a key address from President Donald Trump.

Yields, which fall as bond prices rise, declined in February as the Federal Reserve warned about "substantial uncertainty" surrounding potential changes in U.S. fiscal policy promised by President Donald Trump.

Trump administration officials have cautioned that the administration must first develop a plan for repealing and replacing President Obama's signature health-care law known as Obamacare, something Trump described as a monumentally difficult task, before moving on efforts to reform the tax code among other campaign pledges.

The yield on the 10-year Treasury note was flat at 2.362%, leaving it on track to post a 10 basis point for the month of February. The yields on the two-year note rose 0.8 basis point to 1.208%, on track to notch a marginal monthly drop. The yield on the 30-year bond was unchanged at 2.982%, but remained on track for a 10 basis point drop.

Yields briefly ticked higher as investors digested a torrent of economic data, including the federal government's second estimate of fourth-quarter economic growth, as well as a widely watched report on consumer-price inflation.

But demand for Treasurys quickly reasserted itself. Typically, bond-fund managers buy up Treasurys during the final trading sessions of the month to align their funds with changes in benchmark indexes like the Bloomberg Barclays U.S. Aggregate Bond index, according to Ian Lyngen and Aaron Kohli, fixed-income strategists at BMO Capital Markets.

Tuesday's main event begins at 9 p.m. Eastern, when Trump will address a joint session of Congress. The Wall Street Journal has reported that he will focus on health-care and tax reform.

Gennadiy Goldberg, an interest-rates strategist at TD Securities, said investors will be watching for new details about the president's fiscal plans.

"If there are specific details, then we'll get a little more confident that the agenda is basically intact and the timeline for implementing tax reform and infrastructure spending is basically unchanged from what the House and Trump have been saying," Goldberg said.

(END) Dow Jones Newswires

February 28, 2017 08:57 ET (13:57 GMT)