The yield on the 10-year Treasury declined on Wednesday after U.S. President Donald Trump backtracked on comments he made about firing Federal Reserve Chairman Jerome Powell.
At 4:35 a.m. ET, the 10-year Treasury yield was 4 basis points lower at 4.346%. The 2-year Treasury yield was 3 basis points higher at 3.819%.
One basis point equals 0.01% and yields and prices move in opposite directions.
Investors have remained concerned as Trump continued to take shots at Powell and hinted at firing him recently, with the president calling the central bank leader a “major loser” on Monday, urging him to lower interest rates immediately.
White House economic advisor Kevin Hassett said on Friday that Trump and his aides were exploring the possibility of firing Powell.
However, investors were relieved after Trump walked back those comments on Tuesday, saying he has “no intention” of firing Powell. “Never did,” he added.
Critics have highlighted that removing Powell would be disastrous for U.S. markets, with senator Elizabeth Warren warning last week, “If Chairman Powell can be fired by the president of the United States, it will crash markets in the United States.”
Investor concerns were further eased after Treasury Secretary Scott Bessent suggested there may be a “de-escalation” in Trump’s trade war with China. “No one thinks the current status quo is sustainable,” Bessent said to a group of investors on Tuesday at a meeting hosted by JPMorgan Chase. U.S. tariffs on China remain at 145%, with Beijing retaliating with 125% duties on the U.S.
On the data front, investors will await insights on mortgage rates, the S&P Global PMI Flash, and home sales data, as they look for more hints about the health of the U.S. economy.
