The Treasury Secretary Says Trump Wants Long-Term Interest Rates to Fall—It May Take a While | Global News Avenue

Treasury Secretary Scott Bessent is looking for lower long-term interest rates, but a sharp drop will take time.

This week, carnival President Donald Trump said he focused on implementing policies to reduce the long-term borrowing costs of anything from collateral to business investments to the U.S. government borrows from investors around the world.

In an interview with Bloomberg on Thursday, Bessent said that the U.S. Treasury’s 10-year U.S. fiscal revenue “naturally declines” as Trump’s policies of “energy advantages, deregulation and non-reported growth” are forming benchmarks.

Currently, the long-term rate has indeed declined after Trump’s election. However, some investors are still worried tariffa round of tax cuts may drive inflation.

What affects long-term interest rates?

Trump has long wanted to lower interest rates and publicly urged the Fed to cut its influence in the last administration Federal funding rate Make lending cheaper.

The Fed has more control over short-term interest rates on credit cards and other short-term loans. But long-term interest rates such as 10-year treasury yield or mortgage rates are more driven by inflation, government lending and other long-term factors.

although Eggs are undoubtedly getting more and more expensiveSince its recent peak, inflation has slowed significantly. But the Fed’s struggle with inflation has Has stalled lately.

Tariff-related fears that helped to soar in the 10-year election of Trump, while the president’s election eased Temporarily suspended Tariffs on Canada and Mexico are 25%. But earlier this week, the March 4 deadline for the two countries remained imminent, with tariffs on China being imposed.

Even as Bessent pushes Congress to approve Trump’s tax cut agenda, investors are widely hoping that Washington’s deadlock will hinder the U.S. government from borrowing more.

“There is nothing wrong with all these things that should go wrong,” David Russell, head of global market strategy at Tradestation. “The other shoe didn’t fall. We didn’t get aggressive fiscal policy. We didn’t increase oil prices.”

After flirting with 5% after Trump’s election, the benchmark 10-year U.S. fiscal yield is below 4.5%. According to Freddie Mac, interest rates on 30-year fixed-rate mortgages on fixed-rate mortgages also fell by 6.89% after more than 7% last month.

Russell said investors will have to “wait and see” whether the current momentum will continue.

What prevents further declines in long-term interest rates?

At least for now, Padhraic Garvey, head of regional research at the Bank of America, wrote in a note to clients that there is no “huge downside” for the ten-year yield.

Although the Fed has much less control over long-term interest rates, the short-term interest rates it sets will eventually increase to higher rates over time.

Garvey wrote that the Fed’s less motivated in reducing short-term interest rates, which makes long-term borrowing costs “effectively.” The Fed, beware that inflation progress may stagnate. Paused to lower interest rates last week. It’s in its head Cut rate in 2025 There are fewer forecasts for December than expected in September.

Next Wednesday, the Bureau of Labor Statistics will release its latest Consumer Price Index report, with a new inflation update next Wednesday. Garvey wrote that the recently helpful 10-year yield ended at a low of 4.5% this week, which helped the 10-year yield. He said, but it is not clear whether it will continue.

“Enjoy the lower moves in the process of continuous progress,” Garvey wrote.