US Treasury yields retreated on Monday after the Supreme Court blocked President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook from her post.
The high court’s decision halts the administration’s effort to dismiss Cook, who was appointed in 2022 and has been a target of White House criticism for her dovish voting record on interest rates.
The ruling delivered a decisive legal setback to the executive branch, reinforcing the statutory independence of the Federal Reserve.
Markets interpreted the outcome as a de-escalation of the political risk premium that had been weighing on bond prices.
With the threat of a forced vacancy on the Federal Open Market Committee (FOMC) removed, investors adjusted their expectations for the near-term policy path, favoring stability over uncertainty.
US 10-year Treasury yields fell sharply in the session, while the 2-year yield also declined, reflecting a repricing of rate-cut expectations.