Citigroup strategists have exited a trading recommendation that bet on long-term US Treasuries underperforming amid intensifying attacks on the Federal Reserve, claiming that the Fed's nearly unanimous policy decision last week has "somewhat" reduced concerns about the central bank's independence.

Strategists including Dirk Willer and Adam Pickett advised clients to "take profits" on bets that 30-year rate forwards would fall below five-year rates after the trade reached its "drawdown limit." They initiated this trade at 40 basis points in May, increased their position to 72 basis points in August, and subsequently exited at 60 basis points.

The recommendation made four months ago was based on the premise that President Donald Trump's signature tax and spending legislation would lead to government debt expansion, putting pressure on long-term bonds. In late August, they increased their bets when Trump attempted to dismiss Fed Governor Lisa Cook, raising concerns that political interference could jeopardize the Fed's credibility in fighting inflation.

To the surprise of some market participants, Fed Chair Jerome Powell managed to achieve near-unanimous consensus at last week's policy meeting in support of a quarter-point rate cut. Milan, a Trump appointee, was the only board member who voted for a larger rate cut.

Citigroup strategists noted that supply concerns have become more moderate since the trade was initiated in May. They stated that this month's Fed policy meeting has "somewhat alleviated concerns about Fed independence."