Yields Fall As Speculation Swirls Over Biden Fed Chair Pick

Headlines out over the past hour that Powell and Brainard met with Biden separately yesterday, presumably over the Fed Chair position. We have heard competing theories about what these headlines mean for Powell's re-nomination, as a WSJ article overnight only included Powell going to the White House, not Brainard.

• Many seeing this as a dovish development with Brainard's chances as Chair boosted, BUT haven't seen much of a shift in betting odds on Next Chair (either PredictIt or Betfair, Powell's still 80-85% implied, up from 70-75% yesterday).
• What we do know is that short end yields have fallen further to session lows (2Y below 0.40%), with risk assets gaining, whether this is a contributing driver or not.
• All speculation of course, but Brainard getting the top spot doesn't quite square with the Axios headlines overnight that Biden wants Dem senators to meet w Powell in the next couple of weeks - sounds more like a setup for Powell back as Chair, with Brainard appointed Vice Chair for Supervision (unless of course Biden also asked Sens to meet w her and that hasn't yet been reported).
• But we shall see; all reports are that Biden is expected to decide soon.