• “More tariffs are on the way. First, with aluminum and steel. And then reciprocity with Europe,” Gregory Faranello, head of U.S. rates trading and strategy at AmeriVet Securities in New York, said in a note. The notion is “that if you charge us, we’ll charge you. Keep in mind, neither of these initiatives are new ideas and have been discussed throughout the campaign and
  over the prior few months.”

Yields on U.S. government debt held to a tight range overnight and into Monday morning, despite President Donald Trump’s plan to impose 25% tariffs on imports of steel and aluminum.

What’s happening

— The yield on the 2-year Treasury BX:TMUBMUSD02Y was 4.264%, down 1.3 basis points from 4.277% on Friday. Yields move in the opposite direction to prices.

— The yield on the 10-year Treasury BX:TMUBMUSD10Y was 4.478%, down less than 1 basis point from 4.483% on Friday.

— The yield on the 30-year Treasury BX:TMUBMUSD30Y was 4.685%, little changed from 4.688% on Friday.

What’s driving markets

Yields were little changed to slightly lower on Monday, even after Trump signaled a desire to impose tariffs on all steel and aluminum imports – a move that would cover a broader swath of countries beyond his announced targets of Canada, China and Mexico, to now include countries such as Brazil, Germany and South Korea.

Read: Steel stocks cheer Trump’s tariffs as companies combat ‘unfairly priced’
imports

The president also plans to unveil what’s known as reciprocal tariffs this week, a move he has said is aimed at evening up how the U.S. and other countries treat each other. Strategists at BMO Capital Markets described the lack of much reaction to the president’s tariff plans as being counterintuitive.

“More tariffs are on the way. First, with aluminum and steel. And then reciprocity with Europe,” Gregory Faranello, head of U.S. rates trading and strategy at AmeriVet Securities in New York, said in a note. The notion is “that if you charge us, we’ll charge you. Keep in mind, neither of these initiatives are new ideas and have been discussed throughout the campaign and
over the prior few months.”

Still ahead for Tuesday is the first of two days of semiannual testimony before Congress by Federal Reserve Chair Jerome Powell. Wednesday brings the consumer-price index report for January.