Tariffs

Summers said a combination of major immigration restrictions, federal government layoffs and damage to US competitiveness from President Donald Trump's tariffs.

American lumber producers have alleged that the Canadian lumber system amounts to a subsidy — a charge Canadians deny — and the countries have fought over tariffs on those products for decades.

He also reiterated that he and Trump are focused on bringing down 10-year Treasury yields, rather than on the Fed's short-term benchmark rate.

Rubin, who oversaw a shift to budget surpluses as Treasury chief under Democrat Bill Clinton in the 1990s after serving as co-chairman of Goldman Sachs Group Inc., said that while some federal spending can be cut, "as a practical matter" there's insufficient scope for that to rein in deficits.

The rally gained additional pace late in the session after President Donald Trump said there was no room left for a deal on Canada and Mexico tariffs ahead of their effective date Tuesday.

The potential impacts of import tariffs cloud the outlook, though, and could lead mortgage rates to surge and fall throughout the coming year.

The president's rough-and-tumble trade negotiations have throttled financial markets, causing investors to flock to the safety of dollars and Treasuries. But some economists say this style of policymaking could have hurt the U.S.'s safe haven status in the long run.

Wednesday brings the next pivotal data point, with the release of the latest consumer-price figures, which are forecast to show inflation remains sticky.

Tuesday's declines lifted yields by one to four basis points across maturities after Trump said he'd impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada.

The global pandemic and stalled trade negotiations have discouraged farmers and ranchers from taking on more debt and made banks uneasy about extending more credit.