President Trump considered firing Federal Reserve Chair Jerome Powell, causing bond market unease. Treasury yields surged, with the 10-year near 4.8% and 30-year above 5%. Trump later downplayed firing Powell, but market unease persists over potential Fed interference. The bond market is sensitive to political moves, with key levels to watch to gauge stability.

Yields rose due to speculation about Fed independence and political pressure. Rising yields indicate bond selling, and market unease reflected in falling US dollar. The bond market acts as a check on Fed interference, with bond yields influencing decisions on Powell’s job stability. Expectations of elevated interest rates drive rising yields.

Yields fluctuated based on inflation signals, with PPI and CPI prints impacting market perception of Fed rate-cutting path. Probability of September rate cut dropped below 60%, with Fed likely to remain on pause until December. Rising core goods prices, potentially from tariffs, suggest economic impact filtering through various sectors.

Read more at Yahoo Finance: The bond market is on edge as Trump’s Powell threats resurface