Under political pressure, Powell is about to deliver a speech, and U.S. Treasury bonds end four consecutive days of gains

According to the Zhitong Finance APP, as investors await Federal Reserve Chairman Jerome Powell's speech later on Tuesday, U.S. Treasury yields may end a four-day rise. As of the time of writing, the yield on the 10-year U.S. Treasury bond rose nearly 1 basis point to 4.39%, partially reversing a decline of 10 basis points since the release of weak U.S. June PPI data last week. The yields on the 20-year and 30-year U.S. Treasury bonds both rose about 2 basis points, standing at 4.95% and 4.96%, respectively. At 20:30 Beijing time on Tuesday, Powell will attend a regulatory meeting related to the comprehensive review of large banks' capital frameworks and deliver an opening speech. His remarks are expected to focus on regulatory topics such as the final Basel III framework, stress tests, capital surcharges for large banks, and leverage requirements. However, due to recent pressure from Trump and Republican lawmakers regarding the cost overruns of the Federal Reserve's headquarters renovation, demanding Powell's resignation, his speech remains of significant interest to traders and investors. William John Pulte, Director of the Federal Housing Finance Agency, again posted on X, suggesting that while this speech is not Powell's resignation speech, "Powell's 'resignation speech' will come." Powell is expected not to directly address the situation in tonight's speech but may reiterate the importance of the Federal Reserve's independence. Powell is facing increasing pressure from the Trump administration to resign. Trump and his administration believe that Powell is an obstacle to lowering borrowing costs as they seek to refinance trillions of dollars in upcoming debt. Last week, U.S. Treasury bonds fell sharply after reports surfaced that Trump planned to fire Powell. Trump quickly denied this report. Nitesh Shah, head of research at WisdomTree, stated, "As debt obligations continue to rise, the risk of political influence on monetary policy is increasing." He warned that this could evoke memories of the late 1970s, a time marked by institutional weakening and high inflation. Notably, the possibility of Powell's removal has led investors to start betting on a steeper U.S. Treasury yield curve. A recent report from Deutsche Bank's strategist team stated that if Trump is determined to remove Powell through some rationalized judicial process, the loss of the Federal Reserve's independence would lead to a rise of over 50 basis points in ultra-long U.S. Treasury yields—specifically, the yield on the 30-year U.S. Treasury bond—while the recently declining 10-year U.S. Treasury yield would also enter an upward trajectory. After news surfaced last week about Trump potentially firing Powell, Citrini Research analyst James Van Gelderen quickly issued a "macro trading" alert to about 50,000 clients, proposing a simple strategy: buy 2-year U.S. Treasury bonds while selling 10-year U.S. Treasury bonds. The logic behind this operation is that if the new Federal Reserve Chairman is more inclined to align with Trump's interest rate cut demands, short-term bond yields may decline due to expectations of policy easing, while concerns over weakened central bank independence could push up long-term inflation expectations, thereby raising long-term bond yields Jeffrey Sherman, the Deputy Chief Investment Officer of DoubleLine Capital, also favors this bond trade, stating that it has become the preferred way to hedge against the risk of Trump attempting to fire Powell