The Federal Open Market Committee's decision to reduce interest rates for the first time in nine months lifted bank stocks Wednesday. The 25-basis-point reduction could lead to net interest income headwinds now, but loan growth later, analysts said.

Treasuries climbed across the curve, driving two-year yields down three basis points to 3.51%. Money markets almost fully priced in three Fed reductions by the end of 2025.

A federal district court judge granted an injunction allowing Federal Reserve Gov. Lisa Cook to remain on the central bank's board pending the outcome of her legal challenge to President Donald Trump's move to fire her late last month.

Investors are anticipating the annual preliminary benchmark revision of US payrolls data. Further signs of softening could further raise expectations for Fed easing.

White House National Economic Council NEC Director Kevin Hassett endorsed insulating the Fed from political pressure but echoed Trump allies' calls for reevaluating its mission.

Stephen Miran will take unpaid leave from and might seek to return to President Trump's Council of Economic Advisers, he said, raising conflict of interest questions in his nomination hearing for a seat on the Federal Reserve Board.

Federal Reserve Bank of St. Louis President Alberto G. Musalem said central bank autonomy leads to lower inflation and stable employment numbers. His comments come amid the Trump administration's attempt to remove a Fed board member for cause.

Most big banks saw modest reductions in their requirements following this year's stress tests. The results come as the Fed prepares to smooth year-to-year swings with a new averaging rule.

The 30-year fixed rate mortgage fell 2 basis points this week, Freddie Mac said, but other sources like Zillow and Lender Price reported larger drops.

Yields on two- to five-year notes rose at least two basis points to session highs after the U.S. economy's second-quarter growth rate was revised to 3.3% from 3%, exceeding economist expectations.

Most economists say the solution lies in borrowing less, via some combination of lower spending and higher taxes — rather than leaning on the Fed to make borrowing cheaper.

Successfully taking out Cook would give Trump the chance of gaining a majority of his picks on the seven-member Board of Governors. The board is scheduled in February 2026 to vote.

Traders boosted wagers on a quarter-point cut next month, pricing in a roughly 85% chance of a move, up from around 65% before Powell spoke.

In minutes from the Fed's July meeting, officials highlighted the risks of inflation outweighing concerns over the labor market, which investors overlooked.

The Federal Open Market Committee member is the third Democrat the Trump administration has accused of committing occupancy fraud.

Approximately 60% of economists surveyed by Wolters Kluwer believe the Federal Open Market Committee will act at its next meeting with a 25 basis point cut.

The Federal Reserve governor's term was set to expire in January and President Donald Trump has made it clear that she would not be reappointed. The vacancy will give Trump an opportunity to appoint someone new to the central bank's board.

Hopes that the U.S. will reach other trade deals ahead of its self-imposed Aug. 1 deadline are mounting.

U.S. assets whipsawed Wednesday by reports Trump was preparing to fire Powell, with shorter tenors rallying on the prospect that could lead to faster interest-rate cuts.

Two policymakers have suggested they might support a cut at the July meeting, but most others have signaled they want more time to assess the impact of tariffs on inflation.