Fed Chair Janet Yellen woke up the bond market late Wednesday with a surprisingly hawkish stance, and now markets look forward to testimony Thursday from Donald Trump's Treasury nominee, with one day left before the inauguration.
Congress may ask Steven Mnuchin a lot of questions about his role in his former firm's foreclosures on homeowners, but markets are also going to watch for the former Goldman Sachs partner's comments about the dollar, tax proposals and Treasury supply. Comments about China and its currency will also be of big interest.
"We're going to hang on every word," said Jim Caron, fixed income portfolio manager at Morgan Stanley Investment Management. Caron said that Mnuchin, in an interview on CNBC when he was nominated in November, suggested that the Treasury could issue longer term debt. If he suggests that again, Caron said rates could rise.