Core Viewpoint - Trump's hesitation regarding the nomination of Kevin Hassett as the Federal Reserve Chairman has disrupted the recent calm in the U.S. Treasury market, with market participants reassessing potential interest rate paths based on different candidates' policies [1][5]. Group 1: Market Reactions - Following Trump's comments, betting markets indicated a significant drop in Hassett's chances of being nominated, with former Fed governor Waller's probability rising to nearly 60% [1][3]. - The 10-year U.S. Treasury yield surged to 4.23%, the highest level since September 2 of the previous year, while the 2-year yield reached its highest point since December 9 [3][4]. Group 2: Candidate Analysis - Hassett was previously viewed as the leading candidate to succeed current Fed Chair Powell, known for his loyalty to Trump and potential to advocate for interest rate cuts. His exit could lead to a more hawkish candidate being appointed [3][6]. - Waller, in contrast, is seen as a more unpredictable candidate with a history of hawkish views, even advocating for rate hikes during the financial crisis. His recent calls for rate cuts have raised questions about his future policy direction [6][7]. Group 3: Market Conditions - The recent spike in Treasury yields followed a period of stability, with the 10-year yield trading within a narrow range of just 8 basis points earlier in the month [8][10]. - The low volatility in the Treasury market, indicated by the ICE BofA MOVE index dropping to its lowest level since September 2021, has contributed to the market's subdued activity [10].