America, this isn’t how you lower interest rates
If US officials really want to get interest rates down, they have superior options – including discarding policies that push in the wrong direction
THE US’ leaders have latched onto the idea that they can address some big problems – most notably a gaping budget deficit – by forcing interest rates downward.
If only it were that easy.
US President Donald Trump keeps turning up the pressure on the Federal Reserve to lower short-term rates, publicly expressing his dissatisfaction with chair Jerome Powell. Treasury Secretary Scott Bessent wants to reduce longer-term rates by issuing less long-term US debt. Financial regulators are tweaking capital requirements, encouraging the largest US banks to buy and hold more Treasury securities, which would push prices up and yields down.
Share with us your feedback on BT's products and services
