NEW YORK (CNNMoney.com) - Treasury prices were mostly higher Tuesday, briefly inverting the yield curve in the process as investors bailed on stocks after the Dow tumbled below the 11,000 mark.

The dollar hit a one-month high against the yen and climbed against the euro following inflation-fighting comments by a Federal Reserve policy maker.

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The 10-year note rose 4/32 to 100-29/32, yielding 5 percent, down from 5.02 percent Monday. The yield on the benchmark did slip below the 4.99 percent yield on the two-year note, resulting in an inverted yield curve.

An inversion of the yield curve, or short rates exceeding long rates, has signaled the start of a recession in the past.

The 30-year bond gained 13/32 to 91-4/32 to yield 5.08 percent, down from 5.11 percent in the previous session. Bond prices and yields move in opposite directions.

The five-year note was relatively unchanged, yielding 4.95 percent, while the two-year note slipped one tick to yield 4.99 percent.

Bonds climbed as investors sought safe haven investments after the Dow industrials tumbled below 11,000 for the first time since March.

Bonds were lower earlier in the session after investors reacted to a Wall Street Journal interview with St. Louis Fed President William Poole, who echoed Fed Chairman Ben Bernanke's comments that the central bank needs to keep a close eye on inflation.

Speaking to a group of bankers on Monday, Bernanke said the Fed needed to monitor inflation as the economy is starting to move to a slower pace of growth. (Full story)

The central bank chief called the pace of increases in core inflation "unwelcome developments" and that the Fed must pay particularly close attention to incoming economic information.

Federal Reserve Board Governor Susan Bies added to the flurry of policymaker talk Tuesday, saying she was not sure when the central bank would bring its rate hike campaign to an end, as they try to balance inflation pressure and signs of slowing in the economy.

The Fed will meet again at the end of June to determine whether it will raise interest rates again from its current level of 5 percent.

Federal funds futures markets in Chicago placed the chances that the Fed will raise short-term rates at the end of June at 80 percent by midday on Tuesday, up from 76 percent after Bernanke's comments late Monday, Reuters reported.

In currency trading, the dollar jumped to session highs on Tuesday after Poole's Wall Street Journal interview, where he was quoted as saying it was safer to err on the side of "going a little too far" on raising interest rates to lower inflation expectations.

The euro bought $1.2825, down from $1.2912 late Monday. The dollar traded at ¥113.30, up from ¥112.20 in the previous session.

-- from staff and wire reports

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Yields throw the Fed a curve --click here.