Trump Faces Rising Rates as Mortgage Costs Stay High Before Midterms
Markets expect no rate cuts before the election, and 30-year mortgage rates averaged 6.66%, Freddie Mac said.
- President Donald Trump pledged interest rates would fall to provide 'Rocket Fuel' for the economy, yet Treasury bond rates hit their highest levels in nearly two decades, directly contradicting his campaign promises.
- War in Iran beginning last February, tariffs, and artificial intelligence infrastructure spending have fueled rising borrowing costs, complicating the administration's economic strategy. The 10-year Treasury note shot above 4.7% on Friday, surpassing rates Trump inherited.
- Freddie Mac reported Thursday that 30-year mortgage rates averaged 6.66%, essentially unchanged from a year ago. The government spent $827 billion servicing national debt this fiscal year, exceeding defense spending.
- Federal Reserve Chair Kevin Warsh, appointed in May, has allowed financial markets to set rates rather than the central bank. He told market participants to 'play the ball, not the referee,' signaling acceptance of higher rates.
- Markets expect the Federal Reserve to raise rates at the September 16 meeting to combat inflation. Economist Juan Felipe Riaño warned that if borrowing costs continue outpacing wage gains, Republicans face the same electoral risk Democrats experienced in 2024.
27 Articles
27 Articles
Trump's 'Rocket Fuel' For Growth Remains Elusive. Republicans Face Uneasy November
The Fed's decision to keep interest rates unchanged has once again brought the spotlight back on November midterms, as the prospect of higher borrowing costs loom, posing uneasiness for the tense Republican camp. The Trump administration's own policies have helped drive an increase as policies, including the tariffs regime, have had an adverse impact on several counts.
Trump's push for lower US interest rates faces setback as borrowing costs climb before midterms
Trump's promise of lower interest rates is under pressure as Treasury yields climb and financial markets move contrary to the administration's economic goals. Higher borrowing costs have impacted households, businesses and the federal government. Inflation concerns and policy uncertainty have kept investors cautious about US debt.
Associated Press News
Trump wanted interest rate cuts to be 'Rocket Fuel' for the economy. He is losing that fight so far
President Donald Trump has for months pressured the Federal Reserve to slash interest rates, claiming it would be “Rocket Fuel!” for growth.
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