U.S. President Donald Trump and China's President Xi Jinping leave a business leaders event at the Great Hall of the People in Beijing on November 9, 2017.

The yield on United States government bonds with 3-year maturities climbed to 2.838 percent, while yield on U.S. bonds with 5-year maturities dropped to 2.834 percent. The closely followed spread between the 2-year Treasury note yield and the 10-year Treasury note yield slipped to 16 basis points, further away from inversion.

The Treasury yield curve, the mathematical line that plots interest rates across maturity dates, started on Monday to invert. Inversion occurs whenever short-term rates exceed long-term rates of equal credit rating and is often heralded as a recession indicator.

The yield on the benchmark 10-year Treasury note was seen trading lower at 2.995 percent at around 2:29 p.m. ET, while the benchmark on the 30-year Treasury bond also fell to 3.282 percent.

While Asian markets initially sold U.S. government debt in light of the temporary truce reached at a Group of 20 summit in Buenos Aires, Wall Street's top economists were quick to point out that fundamental issues remains between the two economic powerhouses.

U.S. government debt yields slipped Monday after gaining overnight as investors digested the trade cease-fire brokered between the United States and China.

Though there is a statistical correlation between yield curve inversion and economic downturn, it can take months or years for recession to unfold. Bond yields move inversely to prices.

It will still be "challenging" to find a compromise that all parties like, Goldman Sachs economist Alec Phillips wrote in a note to clients Sunday. While the truce between President Donald Trump and China's Xi Jinping shows that each side is eager to reach an agreement, the brief cease-fire may not give trade representatives much time to discuss fundamental differences in economic policy, he added.

"While the Xi-Trump dinner has clearly improved the tone of the U.S.-China relationship for the time being, and we would expect an initial positive market reaction, the 'pause' prolongs the period of uncertainty around the eventual structure of trade relations between the two countries," Phillips wrote. "The specter of higher and broader U.S. tariffs remains, and the underlying issues clouding the trade relationship are deferred to further negotiations."

Xi and Trump agreed over the weekend to hold off on slapping additional tariffs on each other's goods until March 1, as trade deliberations continue between both countries. In a White House readout of a dinner at the G-20 summit in Argentina, the two world leaders discussed a host of issues, including sanctions on $200 billion worth of Chinese imports to the U.S.

Meanwhile, U.S. fixed-income traders continue to be wary around the Federal Reserve's upcoming policy meeting this month.

Jerome Powell, the central bank's chairman, said last week that the benchmark interest rate was "just below" the neutral level. That remark appeared to backtrack from a previous statement by Powell in which he said rates were still a "long way" from the targeted neutral rate.

The Federal Open Market Committee, which sets the federal funds rate, will gather for a two-day meeting on December 18, where the central bank is strongly expected to hike interest rates.