If President Trump's actions compromise the perceived independence of the Federal Reserve, it will lead to increased risks for bond investors, resulting in higher bond yields and higher mortgage rates, even if the Fed lowers interest rates.
"But Trump is calling Fed independence into question. And if that goes away, there's going to be a whole new set of risks for bond investors. And when risks go up for bond investors, so do bond yields. And that takes mortgage rates up with them. So even if Trump gets what he wants, it might actually result in higher bond yields and higher mortgage rates because investors are afraid of what comes next if the Fed is no longer independent."
