TREASURIES-US Treasury yields off early lows as tariff details awaited

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Goldman Sachs raises U.S. recession probability to 35%

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Trump's tariffs increase risk-off sentiment among investors

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10-year yield on track for third straight monthly fall

(Updates to afternoon US trading)

By Chuck Mikolajczak

NEW YORK, March 31 (Reuters) - U.S. Treasury yields were little changed on Monday, rebounding from earlier declines, as investors awaited U.S. trade policy details as President Donald Trump's tariff deadline approached.

Trump said on Sunday that reciprocal tariffs he is set to announce this week will include all nations, not just a smaller group of 10 to 15 countries with the biggest trade imbalances.

He has promised to unveil a massive tariff plan on Wednesday, which he has dubbed "Liberation Day." He has already imposed tariffs on aluminum, steel and autos, along with increased tariffs on all goods from China.

The White House said on Monday that any nation that treats the United States unfairly should expect to be targeted with tariffs and Bloomberg reported that Wednesday's announcement would feature "country-based" tariffs.

Earlier in the day, yields moved lower and U.S. equities fell sharply as Trump's weekend comments raised recession fears after his tariff rhetoric has unnerved markets for weeks.

The benchmark U.S. 10-year Treasury note yield was unchanged at 4.255% after falling to 4.184%, its lowest since March 20.

Goldman

Sachs raised the probability of a U.S. recession to 35% from 20%. It also projected three consecutive interest rate cuts by the Federal Reserve beginning in July, and reduced its 2025 gross domestic product growth estimate to 1.5% from 2%.

"It's been for the most part, consistent on how trading has been for this year, risk-on, risk-off being driven by whatever the headline news is on tariffs," said Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania.

"The issue is when there's uncertainty around what the path is, then it just leads to risk-off as investors head to the sidelines because it's hard to position accordingly in that type of environment, and that's really what you're seeing."

Recent data have shown a notable weakening in consumer sentiment and growing inflation expectations. On Friday, data showed U.S. consumer spending rebounded less than expected in February while a measure of underlying prices increased by the most in 13 months.

The 30-year bond yield fell 1 basis point to 4.622%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between two- and 10-year notes, seen as an indicator of economic expectations, was at a positive 32.9 basis points.

The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, added 1.4 basis points to 3.924%, but still on track for a third straight monthly fall.

The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 2.665% after closing at 2.623% on March 28.

The 10-year TIPS breakeven rate was last at 2.395%, indicating the market sees inflation averaging about 2.4% a year for the next decade. (Reporting by Chuck Mikolajczak; Editing by Hugh Lawson and Richard Chang)