I’m quite sure he doesn’t care, or at least not yet, right now. And he’s not much for nuance, which means the message would anyway be lost on him.

But someone (read: Scott Bessent) should alert Donald Trump to the bond market’s subtle hint: Firing a Fed governor for anything other than a grievous offense could be risky businesses. And whatever you want to say about the, um, discrepancy in Lisa Cook’s mortgage applications, owner-occupancy fraud isn’t an especially grievous offense. Alleged owner-occupancy fraud isn’t an offense at all. It’s just a charge, and not even an official one until Pam Bondi makes it so.

The moves weren’t large. At all. But the divergence of directionality between the front-end of the Treasury curve and the back-end early Tuesday nodded to the peril inherent in what analysts, strategists and the mainstream financial media finally (belatedly) acknowledged as a flagrant attempt on Trump’s part to commandeer US monetary policy.

There’s the chart. Again, it’s not dramatic. Focus on the substance of the message not the magnitude. Two-year yields slipped as traders anticipated a 4-3 Trump majority on the Fed Board and 30-year yields rose on the possible implications for inflation of a central bank beholden to a populist.

The problem here if you’re Trump is that leaning on the Fed could work at cross purposes with the administration’s stated goal of putting downward pressure on yields from the belly on out the curve.

I discussed this at length in “YCC: Coming Soon To The Fed.” Here’s an excerpt for those of you who might’ve missed that article:

Rate cuts for the hell of them against a deteriorating fiscal trajectory and amid concerns (justified or not) about the rule of law, are a recipe for an unanchored long-end. At the very least, that combination — pro-cyclical, overtly political rate cuts, unfunded tax cuts and mounting evidence of institutional decay — will likely mean un-administered US rates are higher than they would be otherwise. So, if the goal is to cap bond yields such that, for example, mortgage rates come down and the government’s debt service burden doesn’t continue to spiral, Trump may well end up needing yield-curve control.

In other words: If Trump seizes for himself the power to set administered rates (i.e., short-end rates) as he sees fit, he might have to compel the Fed to administer long-end yields too by way of bond-buying.

Would that work? Well, yes. Fighting a Big 3 central bank determined to put a lid on yields is a suicide mission. But it should be noted that the bond vigilantes did succeed in pressuring (“forcing” is too strong) the RBA to abandon its YCC program.

The RBA’s not the BoJ, let alone the Fed, but that episode was a warning: You can’t be half a Kuroda. If you go down the YCC road, you gotta go all the way, and you gotta be willing to defend the cap with the sort of zeal and determination that tells traders, “Try it and get your damn hands chopped off.”

I’m not sure that’s where the Fed wants to go at a time when the Committee’s ostensibly interested in shortening WAM and avoiding another foray into large-scale asset purchases. Ideally, they’ll be buying more Bills going forward, not bonds.

Anyway, Tuesday’s yield moves could well fade, which is why I described them in the past tense in the chart text. But the message is (was) clear enough: Trump’s playing with fire. The “good” news is, that metaphor describes everything Trump does, so if experience counts for anything, I suppose we’re in good hands.