The benchmark 10-year Treasury yield moved higher on Monday as investor worries around the Federal Reserve's independence spurred volatility in the stock market and following the 10-year auction.
The 10-year Treasury yield was up more than 1 basis point at 4.187%. The 30-year bond yield increased more than a basis point to 4.836%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
On Sunday evening, Fed Chair Powell announced that the Department of Justice was conducting a criminal probe into him, focusing on the $2.5 billion renovation to the central bank's headquarters in Washington, D.C.
However, Powell said in a video statement tweeted by the Fed's X account, that the investigation was due to President Donald Trump's frustrations that the Fed refused to cut interest rates based on the president's demands.
"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," Powell said in the video.
Bond investors fear that if Trump takes over the Fed, the central bank could be less vigilant about inflation in the future.
The Fed cut rates three times in 2025, but will likely hold off on more cuts when policymakers meet at the end of January.
Powell added: "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation."
Appetite for government debt among investors looks healthy, as BMO noted that Monday's 10-year auction was "strong." The auction lifted bond prices, sending yields lower.
Investors are looking ahead to the consumer price index on Tuesday and the producer price index on Wednesday, which will provide crucial insights on the health of the U.S. economy.