A longtime lobbyist said Trump’s ongoing threats on Powell, while backing off of firing him, are a combination of “testing the waters to see how bad the backlash would be, his strong desire to get rates lowered [and] him working the refs — hoping to bully Powell and future chairs.”

Traders believes that Trump’s campaign against the Fed could steepen the yield curve, and they are betting on a widening spread between short- and long-duration Treasuries.

Analysts at Deutsche Bank consider the president's removal of Fed chief Jerome Powell "one of the largest under-priced event risks over the coming months."

President Trump has become more hostile to the Federal Reserve’s chair. Markets aren’t worried yet, but some on Wall Street are getting more concerned.

The bond manager hasn’t adjusted its portfolio saying it seems unlikely the president will get his way.