Trump Names Fed Governor Nominee Amid Chair Speculation

Yields close largely unchanged despite disappointing labor data. UST yields were down 1bp this morning as continuing claims reached its highest level since November 2021, highlighting greater difficulty of unemployed workers finding jobs. However, markets quickly moved past the print and two-year yields traded within a tight 3 bp range for the remainder of the day, closing at 3.73%. Longer-dated yields rose slightly as demand lagged once again in the $25B 30-year Treasury auction, an ongoing pattern this week. The 10-year yield closed 2 bps higher at 4.25%.

Trump appoints Miran as Fed governor, Waller likely Chair. President Trump announced on social media that Council of Economic Advisers Chairman Stephen Miran will fill Adriana Kugler’s vacant governor seat. Trump has previously said that his nominee for the governorship would finish out the five months remaining in the term, rather than go on to be a successor for the Chair position. Bloomberg reported today that Fed governor Christopher Waller is the Trump Administration’s top choice to replace Chair Jerome Powell when his term ends in May. Waller has reportedly met with White House officials but has not yet spoken to the President himself, though he has stated that he would accept the role if offered. Trump previously considered Waller for the role in 2018 but ultimately chose Powell.

Bank of England cuts rates to 4% after a revote. In a narrow 5-4 decision on Thursday, the BOE cut policy rates by 25 bps to the lowest level in over two years. The outcome came after a revote as the Monetary Policy Committee failed to reach a majority in its initial vote, the first time in history that the BOE needed two rounds of voting to reach a decision. The BOE’s tight decision, with five members supporting a rate cut and four members supporting a hold, comes after the July FOMC meeting saw a rare double dissent.