President Trump posted a letter on social media addressed to Federal Reserve Gov. Lisa Cook, informing her that he was terminating her due to allegations of mortgage fraud. The move is likely to tee up an unprecedented legal fight over the Fed's independence.

Munis underperformed a UST rally, which had everything to do with Powell's speech at the Jackson Hole symposium and future Fed action, said Cooper Howard, a fixed income strategist at Charles Schwab.

KC Mathews, executive vice president and chief market strategist at Commerce Trust breaks down the FOMC meeting.

The latest inflation report — the producer price index — threw a monkey wrench into expectations for a big rate cut next month, according to some economists, may put into question any easing in September.

"The combination of stronger core and softer headline readings has left some traders struggling for direction," said Daniela Sabin Hathorn, senior market analyst at Capital.com. "There is a reason to be both bullish and bearish depending on which CPI reading you wish to focus on."

Trump advisers are impressed with Waller's willingness to move on policy based on forecasting, rather than current data, and his deep knowledge of the Fed system as a whole, the people said.

Miran, if nominated and approved by the Senate, is only expected to serve a term that expires in January, according to the person, who requested anonymity to discuss internal deliberations.

The Minneapolis Fed chief added that tariffs still represent a significant uncertainty and it's unclear what impact they'll have on inflation.

"I asked him just last night, is this something you want?" Trump said Tuesday in an interview with CNBC. Bessent's response was, "Nope, I want to stay where I am," he said.

The Federal Reserve governor's term was set to expire in January and President Donald Trump has made it clear that she would not be reappointed. The vacancy will give Trump an opportunity to appoint someone new to the central bank's board.

Municipal yields fell four to seven basis points, depending on the curve, while UST yields rallied nine to 30 basis points, with the largest gains on the front end.

The FOMC held rates steady at the conclusion of its meeting Wednesday and offered no hints regarding a September move.

Although the Federal Reserve is not expected to cut rates at this meeting, the market is closely watching for signs of a September easing and how the divide among officials plays out.

There have been critics of SRO authority since they started regulating the financial industry nearly a century ago, but their ideas have yet to find a political moment so suited to them.

As the market continues to contend with the surge in issuance, investors still have a significant amount of cash that can be put to work, said Jeremy Holtz, a portfolio manager at Income Research + Management.

As always, economists had disparate interpretations of the consumer price index, with none expecting a July rate cut. And tariff questions remain unanswered.

The markets are waiting for the Federal Open Market Committee to make its next move.

UST yields rose across the curve in response to the employment report with the two-year rising nearly 10 basis points while municipals largely ignored the moves and ratios fell as a result.

"The trend of heavy issuance that began last year has continued in the first half of 2025, surpassing even our rather optimistic expectations," said Barclays strategists Mikhail Foux, Grace Cen and Francisco San Emeterio.

"We have to navigate policy not only depending on how the environment evolves, but also with keeping those two objectives in mind," Daly said.