Treasury Yields, Dollar Weaken as U.S. Tariffs Go Into Effect

0849 ET – The rise of protectionism in the U.S. weighs on Treasury yields and the dollar, as 25% tariffs on Mexico and Canada imports go into effect. Markets worry that trade restrictions could fuel inflation and curb economic growth. Investors are pricing 70% odds the Fed will cut interest rates at least three times this year, CME data show. That could be a sign that an economic slowdown is a bigger concern now than inflation. The 10-year yield is at 4.120%, on path for its lowest settle since October. The WSJ Dollar Index falls 0.4%. (paulo.trevisani@wsj.com; @ptrevisani)

Dollar Hits 12-Week Low Amid U.S. Growth Concerns

1338 GMT – The dollar extends its losses to reach a 12-week low as concerns about a weaker U.S. economic growth outlook weigh, Monex Europe analysts say in a note. Growth worries are stemming from the Trump administration’s tariffs and broader policies as well as recently soft U.S. economic data, they say. These U.S. growth fears are likely “somewhat overstated.” Markets are also underestimating the impact of tariffs elsewhere and U.S. import levies should remain a net dollar positive, they say. For now, traders might need time to digest the full implications of the latest developments so it could be “tough sledding” for those betting on a stronger dollar. The DXY dollar index falls to a low of 105.878.(renae.dyer@wsj.com)