Market expectations suggest that the Federal Reserve may resume rate cuts as early as June

In light of Trump's chaotic tariff policy and federal government layoffs, bond traders are signaling an increasing risk of economic stagnation in the United States. Less than two months into Trump's presidency, there was speculation that he would inject stimulus measures to expand the US economy and continue to put upward pressure on US Treasury yields, but this speculation is quickly being discarded. Instead, traders have been buying short-term U.S. Treasuries in large quantities since mid-February, with a significant drop in two-year Treasury yields. The market expects the Federal Reserve may resume rate cuts as early as June to prevent economic deterioration.