Long-dated US Treasuries fell as President Trump intensifies efforts to oust Federal Reserve Governor Lisa Cook, raising concerns about inflation. Trump’s move is seen as unconventional and unpredictable, with worries that the Fed board could be stacked with doves. Cook disputes Trump’s authority to fire her, sparking tensions in Washington.

Two-year yields fell on speculation of a Fed rate cut next month, widening the gap between five and 30-year US yields. Fed Chair Powell hinted at a possible rate cut to support the labor market, while Fed Bank of NY President Williams noted low interest rates may continue. Tensions over the US budget deficit persist.

S&P affirms US credit score but warns of pressure if political developments impact institutions or Fed independence. Trump’s push to remove Cook follows a campaign to force Powell to step down early. If Cook is removed, it could negatively impact the dollar’s safe haven status and lead to more selling.

The Bloomberg Dollar Spot Index initially slipped but recovered. Market participants will watch Treasury auctions this week. Trump’s move adds uncertainty to the FOMC’s independence, potentially affecting the dollar’s stability. Cook’s removal could further challenge the currency’s safe haven status.

Read more at Yahoo Finance: Long US Bonds Fall as Threat to Fed’s Cook Stirs Inflation Worry