U.S.

Donald Trump announces that he has fired the Fed’s Lisa Cook.

The Financial Times (emphasis added):

Donald Trump’s move to fire Federal Reserve governor Lisa Cook has triggered bets of lower near-term interest rates, but higher inflation in the future, as worries grow over the US president’s attack on the central bank. The gap between long and short-term yields climbed on Tuesday to its widest in three years.

The shift points to concerns that the Fed will begin lowering rates soon because of mounting political pressure, but will then need to increase them years down the line as policymakers battle inflation.

France

Prime Minister François Bayrou calls a vote of confidence next month over his plans for tax increases and spending cuts, a vote he may well lose.  France’s budget deficit is 5.4 percent, its debt-to-GDP ratio stands at 114 percent.

The Daily Telegraph:

The turmoil sent the yield on 30-year French bonds – a proxy for the cost of long-term government borrowing – up three basis points to a 14-year high of 4.42pc. France’s 10-year yield hit its highest level since March.

Yields on French government debt are now approaching Italian levels, a mark of shame in the EU. The country’s finance minister has warned that there is a risk that France might have to go to the IMF for help.

U.K.

A day of the week ends with a “y.”

The Daily Telegraph:

Britain’s long-term borrowing costs are nearing their highest level since 1998 amid fears that Rachel Reeves is failing to balance the public finances.

The yield on 30-year UK gilts – a benchmark for the cost of servicing the national debt – jumped as much as nine basis points to 5.63pc on Tuesday, close to a 27-year high.

This reflected the biggest daily increase of any major global economy, as economists warned that Britain was paying a “moron premium” on its debt – a phenomenon whereby investors charge countries more to borrow because of previous policy missteps.

Britain’s budget deficit stands at around 3 percent of GDP. Its debt-to-GDP ratio is 96.3 percent. There is talk — wait for it — that Britain might have to go cap in hand to the IMF.

The IMF might need some very deep pockets indeed.

Good times.