The quarter began not with a fizzle, but with a bang. On April 2, the U.S. government
announced sweeping tariffs: a baseline 10% on nearly all imports and higher rates
targeting specific countries.1,2 This brought the average U.S. tariff rate to 22.5% (from an
average of around 2.4%)—the highest level in over a century.3,4 On April 9, a 90-day
pause on the tariffs was announced.5 The pause was driven by volatility in Treasury
markets: the 10-year Treasury yield saw its largest weekly increase since 2001, rising
from 4.0% to 4.5% while the longer-term 30-year yield jumped from 4.4% to 4.9%, its
largest five-day rise since April 1987. White House National Economic Council Director
Kevin Hassett noted that:
“There’s no doubt that the Treasury market made it so that the decision about the
time to move [on the tariff pause] was made with, I think perhaps, a little more
urgency.”6