President Trump is considering candidates for the next Federal Reserve chair with input from bond investors. Bond market influence was evident when a spike in yields paused tariffs. Analysts warn that top contender Kevin Hassett could blur the line between the Fed and the executive branch. The bond market remains stable for now.

Bond yields rose in December as investors believed Hassett was the frontrunner for Fed chair. Yields determine fair interest rates for U.S. Treasury notes. Hassett’s potential nomination has raised concerns about the Fed’s independence. Trump is also considering Kevin Warsh for the role, but the bond market remains calm.

Trump’s selection for the next Federal Reserve chair could impact the economy for years to come. The bond market’s stability will depend on the final decision. Bond yields on ten-year Treasury notes are currently holding steady at 4.14%. It remains to be seen what impact the new Fed chair will have in 2026.

Read more at Yahoo Finance: Bond investors can sway next Fed chair