Trump's Interest Rate 'Rocket Fuel' Dreams Deteriorate Amid War in Iran

President Donald Trump has been struggling to cut interest rates, which he sees as essential for economic growth. He had promised that lower borrowing costs would be 'Rocket Fuel' for the economy and make housing more affordable.

However, since the war in Iran began at the end of February, interest rates have risen, making it harder for families to afford mortgages or auto loans. The government is also feeling the pinch, with $827 billion spent so far this fiscal year on servicing the national debt, surpassing what was devoted to national defense.

The situation became clear when Kevin Warsh, the Fed's new chair picked by Trump, said in his second press conference that inflation continues to run hot but offered no guidance on how to fix it. Interest rates are rising, despite Trump's pledge that they would fall.

Rates on 30-year U.S. Treasury bonds hit their highest levels in nearly two decades, the opposite of what Trump had promised voters. The 10-year U.S. Treasury note saw its interest rate shoot up above 4.7% on Friday, surpassing what the president inherited when he returned to the White House last year.

Trump has largely ignored the jump in interest rates and continues to portray the economy as booming, despite recent data showing an annual growth rate of only 1.5%. He told his Cabinet that 'We have the most successful environment that we've ever had,' but neither he nor his Treasury Secretary discussed interest rates during the public portion of the meeting.