US 10-Year Yield Pressured by Fed Worries
The yield on the 10-year US Treasury note remained steady near 4.27% on Wednesday, as market participants expressed renewed concerns regarding the Federal Reserve’s independence and the possible decline in confidence toward US assets. Earlier in the week, President Donald Trump announced his intention to dismiss Fed Governor Lisa Cook over allegations of mortgage fraud; however, Cook's lawyer announced plans to file a lawsuit to challenge the dismissal. Analysts suggest that Cook’s potential removal might increase the chances of earlier interest rate cuts, with President Trump potentially exerting more influence over the central bank. Currently, markets are anticipating with an 87% probability that the Fed will reduce rates by 25 basis points in September. Investors are also attentively awaiting Friday's release of the PCE price index, which serves as the Fed’s preferred measure of inflation, to gain further insights.
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