Summary
President Trump wants lower interest rates in the U.S., but long-term rates remain high because global market conditions influence them. Despite efforts by the Federal Reserve to cut rates, borrowing costs have increased. The bond market is beyond President Trump's control, affecting his ability to achieve his economic goals.
Key Facts
- President Trump advocates for lower interest rates, aiming for the U.S. to have the lowest rates globally.
- The Federal Reserve lowered interest rates by 1% in 2024 and an additional 0.75% in 2025.
- Despite these cuts, long-term borrowing costs, like the 10-year U.S. Treasury yield, have increased.
- On September 18, 2024, the 10-year Treasury yield was 3.7%; by the latest updates, it was 4.27%.
- The bond market, which sets long-term interest rates, is influenced by global economic conditions.
- President Trump believes new appointments to the Federal Reserve might help achieve lower rates.
- Policies affecting government deficits and bond issuance also impact long-term interest rates.
- Treasury Secretary Scott Bessent stated that the bond market's actions did not alter President Trump's strategies.
