The curious bond counter rally: Here's what to know

Market Trends & Fed Influence - The report analyzes the impact of presidential criticism of the Federal Reserve (Fed) on interest rates and bond yields [1][2] - A research paper suggests Trump's tweets had a significant impact on U S Treasury futures, moving fed funds futures lower by 2 6% basis points [4] - The market may be anticipating the impact of a Trump-appointed Fed chair on future interest rates [8] Factors Influencing Bond Yields - Bond yields are influenced by various factors, including weak ADP reports, strong payroll data, inflation figures, and geopolitical events like Iran hostilities [6] - Deficits, a weaker dollar, and weaker growth also affect bond market trading [7] Fed Independence & Foreign Investment - Questioning the Fed's independence could make U S assets, particularly treasuries, less attractive to foreign buyers [9] Future Fed Composition - Four of the seven Fed board members will be Trump appointees, potentially leading to a more united governor group but a more disparate presidential group [15][16] Fed's Consensus-Driven Culture - The Fed operates with a culture of consensus, where members often defer to the chair and seek agreement on policy decisions [17][19] - Powell has had a low percentage of dissents, indicating his ability to create consensus within the Fed [21]