Yields on Treasury bills that are due in early June dropped on Tuesday on optimism that Congress will pass a deal to raise the country's debt ceiling and avoid a potential default.

A bipartisan deal to raise the $31.4 trillion U.S. debt ceiling now faces a series of votes in Congress, with both Democratic President Joe Biden and the top Republican in Congress, House Speaker Kevin McCarthy, predicting they will get enough votes to pass it into law before Monday.

Yields on Treasury bills that are due in early June had risen sharply on concerns that they will be a risk of not being repaid if the Treasury runs out of cash.

Yields on bills that are due on June 1 fell to 5.09%, after reaching 7.47% last Thursday. Yields on bills due on June 6 fell to 5.43%, from a high of 7.49% last week.

(Reporting by Karen Brettell, editing by Ed Osmond)