Overview

• In June, the Federal Open Market Committee kept its policy rate at 4.25–4.50% despite President Trump’s calls for cuts, reflecting concerns over persistent inflation and tariffs.
• Bessent indicated that candidates will be vetted quickly, aiming to have a nominee by the start of the fourth quarter.
• President Trump’s administration has ordered an inspector general investigation into the Fed’s $2.5 billion headquarters renovation project after reports of $700 million in budget overruns.
• Investors have sold long-term Treasuries and increased positions in inflation hedges, driving 30-year yields above 5% as concerns over monetary politicization rise.
• Analysts warn that undermining Fed independence could lift long-term borrowing costs and weaken the dollar if investors demand higher yields to offset political risk.