UBS: Concerns about independence may lead the Federal Reserve to be more inclined towards tightening.

Paul Donovan of UBS wrote that a lawsuit against a sitting Federal Reserve Chairman could ultimately help the central bank's independence. Market reactions indicate growing concerns about the Fed's ability to manage interest rates without political interference. Despite no major fluctuations in asset prices, long-term US Treasury yields are rising and the US dollar is weakening. Donovan said, "Powell's defiant attitude may indicate that he is unwilling to resign from his position as a Fed governor this year. There are signs that the Senate may delay the confirmation of the nomination of a new Fed chairman." He added that concerns about market perceptions could a tightening force in monetary policy decisions.