Treasury Yields Rise Amid Inflation Data, Fed Leadership Uncertainty

Yields on Uganda’s short-term government debt rose amid strong investor demand, with the Bank of Uganda favoring longer-term 364-day bills to manage funding costs and liquidity risks. In the U.S., Treasury yields inched higher following stronger-than-expected inflation data, with core inflation rising to 2.7% in May, prompting speculation about Federal Reserve policy. President Trump has escalated tensions with Fed Chair Jerome Powell, criticizing the Fed’s cautious approach and reportedly preparing to announce a successor before Powell’s term ends in 2026. Market reactions reflect expectations of a more dovish Fed stance due to limited inflation pressures and weak economic data, including a contraction in Q1 GDP and rising jobless claims. Meanwhile, Malaysian government bond yields declined on easing geopolitical risks and positive trade developments, though analysts caution that renewed global trade tensions and upcoming U.S. fiscal policies under President Trump may push yields higher. Investors globally are closely monitoring U.S. economic indicators and geopolitical events as they weigh the future trajectory of monetary policy and market stability.