Trump’s decision to fire Fed spokesperson Lisa Cook and his push for greater influence over the Federal Reserve sent shockwaves through markets, as U.S. stocks rose, durable goods held up, and bond yields widened.
Key moves
- Trump fires Fed spokesperson Lisa Cook and signals readiness for a legal showdown.
- Trump hints at nominating former World Bank President Patrick Malpass to replace Cook and considers extending Miran’s term.
- Trump seeks to appoint presidents of the Fed’s 12 regional banks, expanding his influence beyond Washington.
- U.S. stocks closed higher: Dow +0.30% at 45,418.70, S&P 0.41% at 6,465.94, Nasdaq 0.44% at 21,544.27, Russell 2000 +0.83% at 2,358.59.
- Durable goods orders slipped 2.8% in July, a smaller drop than the expected 4.0%; non‑defense capital goods ex‑aircraft rose 1.1% versus 0.2% forecast.
- Consumer confidence for August climbed to 97.4, above the 96.2 estimate.
- Fed’s Barkin forecast only a modest 25‑bp interest‑rate cut, with markets pricing an 84% chance of a cut at the next meeting.
- The 2‑year yield fell 4.5 bps, the 10‑year fell 1.6 bps, the 30‑year rose 2.2 bps, widening the 2s‑30s spread to 122 bps, the broadest since January 2022.
- The Treasury auctioned $69 billion of 2‑year notes at 3.641%.
Summary
Despite Trump’s aggressive moves to reshape the Fed, the markets showed resilience, with equities topping out and core business investment indicators holding steady, while bond yields reflected uncertainty over future policy shifts.
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