U.S. Treasury yields rose on Tuesday in volatile trading, as investors focused more on growth and attractive returns in the world's largest bond market, and worried less about global tension arising from U.S. House of Representatives Speaker Nancy Pelosi's visit to Taiwan. Pelosi landed in the defacto East Asian state just before 11 a.m. EST.

The U.S. benchmark 10-year yield rallied from a four-month low of 2.516% to last trade 4 basis points higher at 2.650% .

"The bottom line is that growth prospects in Europe are really terrible, compared to the U.S., given the energy crisis," said Jay Hatfield, chief investment officer at Infrastructure Capital Management in New York. "U.S. rates are also dramatically higher than almost all European rates."

The focus on Pelosi's Taiwan trip, while important because of the geopolitical implications, eased a bit, as investors surmised that a diplomatic resolution will somehow be worked out.

As Pelosi prepared to land in Taiwan, several Chinese warplanes flew close to the median line dividing the Taiwan Strait, a source told Reuters.

"There was certainly a flight to safety earlier, but it's not a big deal any more in the U.S. session. The 10-year yield had a huge overnight move," Infrastructure's Hatfield said. "China has threatened to shoot her plane down, but it's very unlikely. Even if there's one in a million chance that it happens, people are still nervous. I think this will be a tail event that will happen, but will go away," he added.

China has repeatedly warned against Pelosi going to Taiwan, which it claims as its own, while the United States said on Monday that it would not be intimidated by Chinese "saber rattling."

Longer-dated Treasuries were already well bid since weakening U.S. economic data has markets expecting a slowdown in both U.S. growth and the pace of interest rate hikes. The 10-year yield's fall briefly pushed the gap over three-month Treasury yields to -1.6 basis points.

That curve was last steeper on the day at 10 bps. This is the latest part of the U.S. yield curve to move into inverted territory, in a further sign that U.S. recession risks are mounting. On the shorter-end of the curve, U.S. two-year yields were up 6.2 bps at 2.9714%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes deepened its inversion to -35.50 basis points, the most inverted since 2000. An inversion of this yield curve typically foreshadows recession.