National Economic Council Director Kevin Hassett, a top economic advisor to Trump, on Monday rebuked concerns about tariff-related inflation. The Fed, Hassett told CNBC, has been "very, very wrong" in its assessment of a potential resurgence of price increases.

President Donald Trump recently issued a raft of new tariff threats, including steep rates on dozens of countries and a new duty on copper imports.

U.S. Treasury yields will trade in a tight range over the coming months, with a strong majority of bond strategists surveyed by Reuters predicting demand for Treasuries lagging an expected deluge of new supply.

The dollar index is losing momentum near a three week high on Tuesday ahead of US Consumer Price Index (CPI) inflation data, which is due later today. Moreover, Chicago Fed President Austan Goolsbee said that fresh tariffs unveiled by Trump have further muddied the inflation outlook,