Projections for US economic growth in the first quarter still look challenged, which is weighing on Treasury yields and raising new questions about the wisdom of the Federal Reserve’s plans to raise interest rates in the months ahead.

The benchmark 10-year yield ticked up to 2.36% yesterday (Apr. 4), but that’s still close to a five-week low via daily data published by Treasury.gov. “The outlook for yields moving higher much beyond the highs registered earlier in the year have diminished for now,” predicts Peter Cardillo, chief market economist for First Standard Financial. “We see the 10-year yield basically staying range-bound, as the prospects of a trade war remains and attracts the safety trade.”

The renewed appetite for safe havens continues to squeeze US yield spreads, which suggests that Mr. Market’s been paring the outlook for growth lately. The 10-year/2-year yield spread, for instance, is 1.11%, the lowest since last November’s election.

Soft projections for US GDP growth in the Q1 report that’s due later this month aren’t helping. CNBC’s Rapid Update survey of economists is currently forecasting growth of just 1.2% (as of Apr. 4), based on the median estimate. That’s a sizable deceleration from the 2.1% pace in last year’s Q4. The Atlanta Fed’s GDPNow model is also expecting a 1.2% rise in output for Q1 (Apr. 4).

Optimists can still cite the New York Fed’s data, which is projecting a stronger 2.9% advance for GDP in the first three months of this year. But it’s safe to say that the Treasury market is skeptical.

Meantime, a rate hike is considered unlikely at next month’s FOMC meeting, based on Fed funds futures. Data published by the CME Group for Apr. 4 imply a 5% probability that the central bank will lift the current 0.75%-to-1.0% Fed funds target range on May 3. The probability of a rate hike rises to around 60% for the June meeting.

Some analysts say that the bond market is having second thoughts about President Trump’s plans to boost growth through tax cuts, deregulation, and infrastructure spending. “Generally speaking, the rally [in Treasury prices] we’ve seen over the course of the last three weeks, or effectively, since the March FOMC meeting, has been a function of people rethinking Trumponomics and the potential for the administration to deliver anything in terms of real economic growth in the near to medium term,” says Ian Lyngen, head of U.S. rates strategy at BMO.

Strong economic data could change the crowd’s outlook, of course, but this week’s employment updates for March aren’t expected to reignite animal spirits. Private-sector employment in today’s ADP Employment Report is on track to post a substantially softer gain, albeit after a strong rise in February, based on Econoday.com’s consensus forecast. Ditto for Friday’s official data on payrolls from the government. Economists expect that the Labor Department will report that US companies added 170,000 workers last month, down from 227,000 in February.

Moderate growth remains a reasonable forecast for the near term. That’s not terrible, but for the moment the case for expecting a sharp upturn in US economic activity has minimal support in the data. The bulls are hoping that this week’s data on payrolls for March will tell us otherwise.