Bond yields rose sharply Friday morning, following news that former Fed governor Kevin Warsh met with President Trump on Thursday.
CNBC writes that Warsh, a hawkish choice for Fed chair in the eyes of many bond traders, is seen as increasingly likely to succeed Janet Yellen, whose term ends in February.
“The key factor that the market is focusing on is he would be less accommodative than Yellen has been as a baseline in terms of QE, the path of tapering and the potential path of rate hikes. All of that should be reconsidered if Warsh is a serious candidate and it sounds like he is,” Aaron Kohli, director fixed income strategy at BMO was quoted by CNBC as saying.