U.S. Treasury yields moved higher on Wednesday after President Donald Trump shut down speculation that he’s planning to fire Federal Reserve Chair Jerome Powell imminently.
The
10-year Treasury yield
was up nearly 2 basis points at 4.465%. The
2-year yield
rose 3 basis points to 3.911%. The
30-year note
was little changed, yielding 5.018%.
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One basis point is equal to 0.01% and yields and prices move in opposite directions.
Investors are monitoring the
Trump-Powell situation
after the president denied plans to fire the central bank leader, despite saying he would do so earlier in the day on Wednesday.
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“We’re not planning on doing it,” he said at the White House. “I don’t rule out anything … but I think it’s highly unlikely, unless he has to leave for fraud.”
That was hours after Trump had a meeting in the Oval Office, where he asked a group of House Republicans if they thought he should fire Powell. On receiving support for the move, Trump said he would follow through, per a senior White House official.
“So, for about an hour, we had a brief glimpse of the likely market reaction as investors started to view Powell’s removal as a serious prospect. Notably, there was a huge steepening in the yield curve as investors ramped up the prospect of a near-term rate cut,” Deutsche Bank analysts said in a note.
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“Ultimately, the bulk of those moves unwound after Trump’s comments,” they added.
On the economic data front, investors will await a slew of reports including weekly initial jobless claims, retail sales data for June, and last month’s import and export price indexes.
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Bond yields show investors aren’t taking Trump’s threats to Powell serious
