Trump's tariff actions rattle markets and the US dollar

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President Trump raised US tariffs to a 115-year high on April 2nd – a day he dubbed "Liberation Day." But one week later he called for a pause. What happened?  

By April 8, the yield on 10-year Treasury bonds was on a path to rise more than 0.4%. That may not sound like much, but even small increases can have huge impacts on national debt, mortgages and credit card debt.  

And notably, the US dollar’s exchange rate did not get stronger. 

Investing in US treasuries is supposed to be the safest instrument in the world. When yields rise, investments come into the US. The dollar appreciates.  

Instead, what spooked markets is that investors pulled away. The dollar depreciated against a basket of currencies, and on April 9, President Trump froze tariffs at 10%. 

Since then, Treasury yields have been volatile. They have not gone back down. The dollar has continued to depreciate, and markets have signaled in their language that their confidence is rattled.

As tariff negotiations continue, tracking how Treasury yields and the dollar interact may be our best guide to navigate uncertainty.