The Financial Post reports in its Tuesday edition that bond traders are signalling an increasing risk that the U.S. economy will stall as U.S. President Donald Trump's chaotic tariff rollouts and federal work-force cuts threaten to further restrain growth. A Bloomberg dispatch to the Post says speculation that Mr. Trump would pour stimulus on to the country's expansion -- and keep upward pressure on Treasury yields -- is being rapidly swept aside less than two months into his presidency. Instead, traders have been piling into short-dated Treasuries, pulling the two-year yield down sharply since mid-February, on expectations the Federal Reserve will resume cutting interest rates as soon as June to keep the economy afloat. "Just a couple of weeks ago we were getting questions about whether we think the U.S. economy's reaccelerating, and now all of a sudden the R word is being brought up repeatedly," said Gennadiy Goldberg, head of U.S. interest rate strategy at TD Securities, referring to the risk of a recession. "The market's gone from exuberance about growth to absolute despair." A key driver has been Mr. Trump's brewing trade war, which is likely to deliver another inflation shock and roil global supply chains.
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