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Treasury yields continued to move higher on Wednesday ing the efforts by President Donald Trump to take charge of the Federal Reserve.The 30-year Treasury yield rose more than 2 basis points to 4.931%, and the 10-year Treasury yield was less than 2 basis points higher at 4.271%.
Meanwhile, the 2-year yield was also higher by less than 2 basis points at 3.656%.Investors are worried that while a Trump-controlled Fed could lower short-term rates, long-term yields could rise as the central bank becomes less attentive to fighting inflation.One basis point is equal to 0.01% and yields move inversely to prices.Investors are still reeling from the shock of U.S.
President Donald Trump saying that he's removing Federal Reserve Governor Lisa Cook from her position earlier this week.
On Tuesday, the president said that he'll "have a majority very shortly" of his nominees on the central bank's board of governors as he pushes to cut interest rates.Trump announced the move in a letter posted on Truth Social Monday, citing allegations by Federal Housing Finance Agency Director Bill Pulte that she had made false statements on applications for one or more of her mortgages.Cook is planning to sue Trump over the firing and has filed a lawsuit challenging the removal by the president.
Cook's lawsuit may be filed as soon as today, CNBC's Steve Liesman has learned."President Trump has no authority to remove Federal Reserve Governor Lisa Cook," Abbe Lowell, her lawyer, said in a statement.The Fed has said that it would abide by any court decision regarding whether Trump has the legal authority to remove Cook.Alongside these developments, investors will also be monitoring a raft of economic data, including the gross domestic duct growth rate for the second quarter and July's pending sales on Thursday morning.The big release of the week will be the personal consumption expenditures index, the Fed's preferred inflation gauge, on Friday, which will offer fresh insights into the health of the U.S.
economy.