U.S. Treasury Secretary Janet Yellen: Europe's sell-off of U.S. Treasuries is a "false narrative," new Federal Reserve Chair to be announced as early as next week

U.S. Treasury Secretary Mnuchin refuted claims that European countries might sell U.S. Treasury bonds and revealed that the Trump administration could announce the new Federal Reserve Chair as early as next week. This statement aims to stabilize market confidence in the demand for U.S. Treasuries while providing a clear timeline for the leadership transition at the Federal Reserve.

According to media reports, Mnuchin stated to reporters in Davos on Tuesday that the notion of Europe selling U.S. Treasuries is "completely illogical," and that there is "no such discussion" in Europe. He called it a "false narrative" and expressed "strong opposition" to it.

The Secretary also confirmed that President Trump "may announce the new Federal Reserve Chair as early as next week," with "four outstanding candidates" currently under consideration. Previously, Mnuchin had indicated that Trump planned to make this decision in January, likely around the time of the World Economic Forum in Davos.

The new Chair will take over a central bank that is currently caught in a tug-of-war between institutional independence and executive demands. Over the past year, the current Chair Jerome Powell has faced criticism from Trump regarding the pace of interest rate cuts, raising concerns that the new Chair's political leanings could trigger volatility in the bond market and affect the dollar's trajectory.

Claims of U.S. Treasury Sales Refuted

Mnuchin explicitly denied recent market rumors that European countries might sell U.S. Treasury bonds while in Davos. According to Bloomberg, the Secretary stated, "There is no such discussion in Europe," and called such claims "completely illogical."

His response to the rumor was strong, stating that he "could not more strongly oppose" this viewpoint. This statement aims to stabilize market confidence in the outlook for U.S. Treasury demand, especially against the backdrop of close scrutiny of the movements of major global creditors.

He also mentioned that Europe is a center of regulatory chaos and urged all countries to adhere to trade agreements.

Federal Reserve Chair Candidate Announcement Imminent

The Trump administration is accelerating the process of transitioning the Federal Reserve leadership. Mnuchin revealed that the President may announce the new Chair as early as next week, with four candidates currently being considered.

The new Chair will succeed Powell, who has been a frequent target of Trump's criticism over the past year, primarily regarding the pace of interest rate cuts. This ongoing public dispute highlights the tension between the central bank's institutional independence and the policy demands of the executive branch.

Wall Street is closely monitoring the market impact of this nomination. Investors generally believe that the ability of the Federal Reserve Chair to achieve inflation targets while resisting political interference is a key factor for global financial stability. If the new Chair is perceived by the market as more politically inclined, it could trigger volatility in the bond market and exert pressure on the long-term trajectory of the dollar