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.

US Treasuries fell for a fifth day as demand for long-term government debt across the globe wanes amid a flurry of bond auctions this week.

After passing the Federal Reserve's stress tests with high marks, large banks announced dividend increases. In some cases, they also said the Fed had conceded that certain prior calculations needed to be revised.

The Federal Reserve's preferred measure of inflation moved further from its 2% target, underscoring the central bank's reluctance to cut rates.

Consumer spending and exports fell slightly in the latest estimate, leading to a downward revision. Imports, which dragged down overall output during the first three months of the year, also came in smaller.

Some allies of the president have pushed for Treasury Secretary Scott Bessent to get the job, according to people familiar with the matter, a notion that a senior administration official disputed.

Renewed expectations that the Federal Reserve could start cutting interest rates as soon as next month supported gains in the bond market.

Federal Reserve Chair Jerome Powell said the changes could touch the central bank's quarterly economic forecasts. He also discussed downsizing at the Fed and his tenure on the board of governors.

The Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency are focusing on what's known as the enhanced supplementary leverage ratio.