Institutions: The U.S. Treasury Market Has Not Fully Priced in the Risk Event of a Change in Federal Reserve Chair

According to a report by Jinse Finance, Natixis analyst John Briggs stated that the increasing pressure from the White House on Powell has not yet been fully priced into the US Treasury market. Investors are currently pricing in rate cuts for this year, which has pushed down short-term yields. The faster rise in long-term yields is typically attributed to concerns over the US fiscal deficit. "Unless we gain a clearer understanding of Trump's preferences for the next Federal Reserve Chair, I don't think the market will be affected in terms of pricing," Briggs said. Powell has indicated that he will remain in his position until his term ends in May. Trump is expected to select a more dovish successor.