President Donald Trump does not need the Federal Reserve to ease monetary policy to lower interest rates, and is focusing on 10-year Treasury yields instead, Treasury Secretary Scott Bessent said on Thursday.
In an interview with Fox Business host Larry Kudlow, Bessent acknowledged that the White House aims to lower long-term interest rates. However, the Federal Reserve’s implementation of more rate cuts is not the only mechanism that can facilitate a low-rate environment.
“He and I are focused on the 10-year Treasury,” Bessent said, adding that Trump is not requesting the Fed to lower the benchmark federal funds rate.
The central bank influences yields on short-term debt securities. The financial markets control long-term yields like the benchmark 10-year Treasury bond, reflecting investors’ expectations of the broader economy. This determines other factors, including home mortgages, corporate loans, and the federal government’s borrowing costs….