Treasury Moves, Fed Watches: A 'Game of Thrones' in the Bond Market

English summary

On August 20, after the U.S. Treasury intervened in the bond market, two Fed officials reiterated policy independence; St. Louis Fed's Musalem hinted at a September hike, while San Francisco Fed's Daly saw limited signals from long yields and supported July's hold. The Treasury's intervention briefly lowered yields before a rebound, as markets focus on who drives financial conditions and coordination risks, potentially affecting Treasury yields and Fed rate expectations.