US 30-Year Bonds Extend 2025 Slide on Fed Worries: Markets Wrap

(Bloomberg) — The dollar fell, longer-dated bond yields rose and stocks wavered as Donald Trump’s push to remove Federal Reserve Governor Lisa Cook fueled concerns about central bank independence and inflation risks.

While the moves were modest in listless summer trading, they underscored growing unease over political interference in monetary policy. That could give Trump another chance to name someone to the Fed board as he repeatedly pressures officials to cut rates.

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The slide in 30-year Treasuries also followed losses in longer-dated debt from France and the UK, extending a drop that’s been driven by concerns about inflation and ballooning budget deficits. A solid $69 billion sale of two-year notes added to gains in short-dated maturities. The gap between five and 30-year yields is the widest since 2021.

While a dollar gauge dropped by just 0.2%, the greenback slid against all developed-world counterparts. The S&P 500 was little changed, with Nvidia Corp. outpacing fellow megacaps ahead of its results.

Trump moved to oust Cook following allegations that she falsified mortgage documents. Cook was defiant, saying she won’t step down. Her lawyer pledged to take “whatever actions are needed.” The central bank declined to comment.

“Trump’s push to fire Cook has exacerbated concerns about the Fed’s independence,” said Ian Lyngen at BMO Capital Markets. “While the price action in US rates has been largely contained to the recent range, many of the go-to hedges against an erosion of Fed independence outperformed on the news of Cook’s firing.”

Even as political headlines flare, investors remain anchored to a bullish market script: a likely September rate cut, resilient economic growth, and corporate earnings strong enough to keep equity sentiment afloat.

“An independent Fed remains the dominant framework,” said Dennis DeBusschere at 22V Research. “There is no reason to go against that yet, but hedges are important.”

Read: New BIS Head Warns Against Questioning Central-Bank Independence

“This issue likely to get kicked to the courts for resolution,” said Brad Bechtel at Jefferies. “If it does go through, then clearly Trump has another seat to fill and that should then tip the board in his favor from a political alignment perspective.”

The Fed’s perceived independence from government whims is a bedrock assumption of US markets, and any change to that perception could weigh on US credit ratings.

S&P Global Ratings has recently warned that the nation’s credit rating could “come under pressure if political developments weigh on the strength of American institutions and the effectiveness of long-term policymaking or independence of the Federal Reserve.”

“We will continue to monitor rising political pressure on the Fed, but expect its decision-making to remain guided by its mandate in the near term,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.

More specifically, she noted Chair Jerome Powell’s recent dovish signals at Jackson Hole that have reinforced market expectations for US rate cuts starting in September.

“Looking further ahead, the risk of a more politicized Fed could increase over the next 6-12 months, particularly if partisanship also grows among regional Fed presidents,” she noted.

“The pathway for political uncertainty to hit the US economy runs through the bond and currency markets, and so far, the moves there have not been large, noted Don Rissmiller at Strategas.

“So, we will focus on the economic data, which have weakened but appear to be trying to carve out a bottom in key sectors,” he added.

US orders for business equipment increased in July by more than projected, suggesting companies are moving forward on investment plans as uncertainty around trade and tax policy gradually diminishes. Meantime, US consumer confidence fell slightly in August as Americans worried more about their prospects of finding a job.

“Consumers don’t appear afraid, but perhaps restrained,” said Bret Kenwell at eToro. “Corporate conference calls reveal what appears to be a resilient consumer, while retail sales echo similar reassurances.”

Fed Bank of Richmond President Tom Barkin said his forecast is for a modest adjustment in interest rates given what he expects will be little variation in economic activity over the remainder of the year.

Corporate Highlights:

Apple Inc. plans to hold its big fall product launch on Sept. 9, when the company is expected to introduce an iPhone 17 lineup that includes a new skinnier version of its signature device. President Trump said that Meta Platforms Inc. is planning to spend $50 billion on its massive data center in rural Louisiana. US Commerce Secretary Howard Lutnick suggested the government is looking at the defense sector and other industries for potential stakes in companies after an unorthodox deal that saw the US obtain a 10% share in chipmaker Intel Corp. President Trump said Cracker Barrel Old Country Store Inc. should go back to its old logo after facing blowback for its new design. EchoStar Corp. has agreed to sell spectrum licenses to AT&T Inc. for about $23 billion in a deal that will help the company stay out of bankruptcy and fend off regulatory concerns about its airwave use. Eli Lilly & Co.’s experimental obesity pill helped patients lose 9.6% of their body weight in a trial that moves the company one step closer to a potential approval. Retail trading platform Interactive Brokers Group Inc. will be added to the S&P 500 later this week, replacing Walgreens Boots Alliance Inc. on the closely watched gauge of US stocks. South Korean firms announced a flurry of deals with US businesses, including $50 billion in agreements with Boeing Co. and GE Aerospace, after the nations’ leaders met in-person for the first time in Washington on Monday. Bank of Montreal topped estimates on stronger-than-expected performance at its US division as the lender works to improve the business’s prospects and loan-loss provisions came in lower than forecast. Bank of Nova Scotia topped estimates after posting strong performance in its Canadian and international banking units and higher overall revenue as it pursues a turnaround plan. Orsted A/S raced to reassure investors over a proposed 60 billion-krone ($9.4 billion) share sale, saying it will go ahead as planned and cushion the beleaguered Danish wind giant against any worst-case scenario. Ping An Insurance (Group) Co.’s profit fell 8.8% in the first half as investment returns were dented by stock market volatility and lower interest rates during China’s economic slowdown. Some of the main moves in markets:

Stocks

The S&P 500 was little changed as of 1:44 p.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average was little changed The MSCI World Index fell 0.2% Bloomberg Magnificent 7 Total Return Index fell 0.2% The Russell 2000 Index rose 0.9% Nvidia rose 0.9% Currencies

The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1646 The British pound rose 0.2% to $1.3478 The Japanese yen rose 0.3% to 147.31 per dollar Cryptocurrencies

Bitcoin was little changed at $109,641.76 Ether rose 3.8% to $4,519.5 Bonds

The yield on 10-year Treasuries declined two basis points to 4.25% Germany’s 10-year yield declined three basis points to 2.72% Britain’s 10-year yield advanced five basis points to 4.74% The yield on 30-year Treasuries advanced one basis point to 4.90% The yield on 2-year Treasuries declined four basis points to 3.68% Commodities

West Texas Intermediate crude fell 2.3% to $63.32 a barrel Spot gold rose 0.5% to $3,381.85 an ounce ©2025 Bloomberg L.P.