Fed independence concerns raising risk premia – research
Authors of BBVA study say long-term yields briefly spiked amid rumours that Trump would fire Powell
Concerns about the US Federal Reserve’s independence are continually weighing on term premia, according to new research from financial services company BBVA.
The paper, published on July 24, notes that long-term yields briefly spiked amid media reports that president Donald Trump intended to fire Fed chair Jerome Powell.
The authors, Javier Amador and Iván Fernández, say the widening spread between 30- and 10-year Treasury yields also suggests that the spike, though brief, reflected “a gradual
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