The floor of the New York Stock Exchange on April 7, 2025.

U.S. Treasury yields climbed again Tuesday after a weak Treasury auction. Traders also weighed the effect of President Donald Trump’s revamped tariff policy on the outlook for economic growth and inflation.

The yield on the 10-year Treasury rose 12 basis points to 4.285%, while the the 2-year Treasury yield inched down 2 basis points at 3.715%.

One basis point is equivalent to 0.01%. Yields and prices move in opposite directions.

The Treasury Department auctioned $58 billion in 3-year Treasury notes Tuesday in the first coupon supply since Trump announced higher tariffs on April 2. Yields remained higher after what was a “weak” auction, according to Vail Hartman, U.S. rates strategist at BMO.

Some traders have speculated foreign owners are selling some Treasuries, putting upward pressure on yields.

The benchmark 10-year Treasury yield fell as low as 3.8% last week and traded below 3.9% early Monday before surging later in the day to hit 4.14% — its biggest one-day move in a year, according to Trade Nation analyst David Morrison.

Over the weekend, Trump pledged to keep his aggressive tariff policy, imposing an initial, unilateral 10% tariff and a wider swath of “reciprocal” tariffs set to begin on April 9.

Trump on Monday said he would slap additional 50% duties on U.S. imports from China if Beijing doesn’t lift the 34% tariffs it imposed on U.S. products last Friday. China said it won;t be intimidated by U.S. trade threats and vowed to “fight to the end.”

“Because the tariffs announced thus far are higher than previously expected, we think the risk is now skewed toward more rate cuts by year-end,” said Saira Malik, head of Nuveen equities and fixed income.

“Our probability-weighted guidance has increased from a total of four Fed cuts through 2025 and 2026 to 6.6 cuts, while our assessment of fair value for the 10-year U.S. Treasury yield has fallen from 4.5% to 4.0%,” she added.