Trump's Interest Rate Gambit Backfires as Borrowing Costs Soar
President Donald Trump has been pushing for interest rate cuts to boost the economy, but so far, he's losing that fight. Trump has publicly pressured the Federal Reserve to slash its benchmark rates, claiming it would be 'Rocket Fuel!' for growth and make housing more affordable.
However, since the war in Iran began at the end of February, borrowing money has become more expensive, making it harder for families to afford mortgages or auto loans. The government is also getting squeezed, as it has spent $827 billion so far this fiscal year to service the national debt, more than what it has devoted to national defense.
Interest rates are rising, even though Trump pledged they would fall. Rates on 30-year U.S. Treasury bonds have hit their highest levels in nearly two decades, while the 10-year U.S. Treasury note saw its interest rate shoot up above 4.7% on Friday.
Trump has largely ignored the jump in interest rates and has portrayed the economy as booming, despite the government reporting a sluggish annual growth rate of 1.5% for the prior three months.