Treasury yields are flat as investors digest Trump-Powell fight

U.S. Treasury yields moved higher on Wednesday after President Donald Trump shut down speculation that he's planning to fire Federal Reserve Chair Jerome Powell imminently.

The 10-year Treasury yield was up nearly 2 basis points at 4.465%. The 2-year yield rose 3 basis points to 3.911%. The 30-year note was little changed, yielding 5.018%.

One basis point is equal to 0.01% and yields and prices move in opposite directions.

Investors are monitoring the Trump-Powell situation after the president denied plans to fire the central bank leader, despite saying he would do so earlier in the day on Wednesday.

“We're not planning on doing it,” he said at the White House. “I don't rule out anything ... but I think it's highly unlikely, unless he has to leave for fraud.”

That was hours after Trump had a meeting in the Oval Office, where he asked a group of House Republicans if they thought he should fire Powell. On receiving support for the move, Trump said he would follow through, per a senior White House official.

“So, for about an hour, we had a brief glimpse of the likely market reaction as investors started to view Powell's removal as a serious prospect. Notably, there was a huge steepening in the yield curve as investors ramped up the prospect of a near-term rate cut,” Deutsche Bank analysts said in a note.

“Ultimately, the bulk of those moves unwound after Trump's comments,” they added.

On the economic data front, investors will await a slew of reports including weekly initial jobless claims, retail sales data for June, and last month's import and export price indexes.