The yield on the 10-year US Treasury note fell for a sixth consecutive session to 4.28% on Thursday, its lowest level since May 7th, as expectations mounted that the Fed may begin cutting interest rates sooner than previously projected.
According to the Wall Street Journal, President Trump is considering announcing his nominee for the next Fed Chair as early as September or October, positioning a “shadow” chair who could shape market sentiment and advocate for a more dovish policy stance.
Trump has consistently criticized Chair Powell for keeping rates unchanged and resisting further cuts.
Markets are now pricing in 62 bps of rate reductions by year-end, up slightly from 61 bps the day before.
In testimony before Congress, Powell reaffirmed that current economic conditions support holding rates steady, citing inflation risks tied to the administration’s tariff policies.
However, he acknowledged that absent those pressures, the Fed likely would have pursued further easing.
