(RTTNews) – Extending the upward move seen over the course of the previous session, treasuries moved to the upside during trading on Wednesday.
Short-term and long-term treasuries moved in opposite directions early in the session but moved mostly higher as the day progressed.
Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 2.0 basis points to 4.238 percent.
The two-year yield showed a more notable move to the downside, while the thirty-year yield ended the day roughly flat after hitting its highest intraday level in a month.
The advance by treasuries came as traders continued to digest President Donald Trump’s interference with the Federal Reserve following his decision to fire Fed Governor Lisa Cook earlier this week.
In a letter posted on Truth Social on Monday, Trump said he is removing Fed Governor Lisa Cook from her position amid accusations she made false statements on one or more mortgage agreements.
However, Cook responded with a statement claiming Trump does not have the authority to fire her and said she will not resign. Cook said she will file a lawsuit challenging her removal, while the Fed said it will “abide by any court decision.”
Many investors believe Trump’s interference will lead to lower interest rates in the short-term but push up long-term borrowing costs.
“Donald Trump is irreverently flouting the old adage that you shouldn’t fight the Fed,” said Danni Hewson, head of financial analysis at AJ Bell.
She added, “In fact, he’s the one picking the fight. Central bank independence is a keystone in anchoring long-term inflation expectations, and that is being put under threat by the US president.”
Trading on Thursday may be impacted by reaction to the latest U.S. economic data, including reports on weekly jobless claims, second quarter GDP and pending home sales.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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