President Trump on Wednesday sought to calm fears over rising bond yields, telling reporters at a White House meeting with cryptocurrency executives that the U.S. economy is strong enough to withstand current borrowing costs. “No, I don’t think so,” he said when asked if Americans should be worried about bond market volatility. “Our country is doing so well despite interest rates.”
The president’s remarks came as long-term borrowing costs worldwide climbed to multi-year highs. The yield on the 30-year Treasury bond surpassed 5.3 percent on Tuesday, a level not seen since April 2007. That spike has reignited concerns about government debt sustainability and the Federal Reserve’s policy path.
Trump repeated his long-standing criticism of the central bank, calling interest rates “artificially high.” He argued that the Fed’s rate-setting decisions are hampering economic activity. “They raise them for no reason, and you can’t go out to the market when you have a Fed that’s raising interest rates,” he said. “You can’t say I want to pay 3 points less than what the Fed says you’re supposed to be paying.”
Trump framed the economy as resilient despite the Fed’s stance. “I think we have a very powerful country, and we’re powering through these ridiculous interest rates,” he added.
The Treasury Department responded to the bond market stress by announcing it would double the maximum amount of long-term debt it can repurchase, increasing the buyback ceiling from $2 billion to $4 billion. The change takes effect on Sept. 9. The move is seen as an attempt to stabilize the market, though analysts note it is modest relative to the size of the Treasury market.
The Fed’s decisions on interest rates directly influence bond prices and yields. Despite Trump’s repeated calls for cuts, the central bank has shown no inclination to ease. Minutes from last month’s Federal Open Market Committee meeting indicated that some officials still favor raising rates if inflation does not subside. The minutes stated that “policy tightening would likely be necessary if inflation did not decline,” and that a few participants who supported a hike believed it would “help forestall the need for a steeper and potentially more costly sequence of tightening moves at a later stage.”
The president’s comments come amid a broader push to lower borrowing costs, which he has argued would boost housing, manufacturing, and consumer spending. However, economists warn that cutting rates prematurely could reignite inflation, which remains above the Fed’s 2% target.
During the same event, Trump touted his administration’s engagement with the crypto industry, a sector that has grown increasingly influential in Washington. The meeting was part of a broader tech innovation push that includes crypto executives, though some notable firms were excluded from the summit. The president’s family has also faced scrutiny over their crypto ventures, with a recent poll showing a majority of Americans view those profits as inappropriate.
As the bond market remains volatile, investors will be watching the Fed’s next moves closely. The central bank is scheduled to meet again in September, and any decision will have significant implications for the economy and the 2024 election campaign.
