The yield on the US 10-year Treasury note edged up to 4.2% on Monday, its highest level since late August, while the 30-year yield rose more than 4bps to 4.86%. The move came amid renewed concerns over the Fed’s independence after Chair Powell said on Sunday that the Department of Justice is conducting a criminal investigation related to the $2.5 billion renovation of the Fed’s headquarters. Powell stated that “the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President”. At the same time, investors are awaiting a series of key economic data releases this week that should provide further guidance on the Fed’s policy outlook. The CPI report due tomorrow is widely expected to show a pickup in inflationary pressures, reinforcing expectations that the Fed will keep interest rates unchanged at this month’s meeting.
