Cnn
B (b (b (
Treasury Secretary Scott Basant has a new plan to fight historically high interest rates, and has nothing to do with the Federal Reserve.
Basant said in two interviews this week, saying the Trump administration wants to focus on reducing long -term interest rates, which are widely affected by production on the 10 -year -old US Treasury note. On the other hand, feed decisions have a more direct impact on the short -term interest rates, which control the borrowing costs for Americans.
On his fourth day, President Donald Trump said he would “demand immediately reduce interest rates” and he considers monetary policy “much” than the central bank and its leader, Jerome Powell. He has also advocated that Powell should be fired, though he has returned in recent comments.
Nevertheless, despite the barrage of Trump’s criticism against the feed, Basanti assures the Wall Street that the administration is not trying to twist the arm’s arm, but to prepare its point of view.
“He is not pushing the feed at low rates,” Basant told Fox Business on Wednesday. ” Instead, he said, the Trump administration is focused on reducing the production of a 10 -year treasury. “If we disrupt the economy, if we complete this tax bill, if we reduce the energy, we will take care of the rates and the dollar will take care of itself,” he said.
On Thursday, Basant told Bloomberg TV that “we are not focused on whether the feed is going to be cut.”
It can be revealed to Paul as some relief, as it is a clear entry that the administration intends to respect the right to make decisions for monetary policy without any political influence of the central bank.
Feed has the basic key to controlling interest rates that Americans pay for borrowing, mainly by buying and selling government loans. The Basant Department’s plan to remove the Treasury from the feed is unusual.
“It is unconventional to play an active role in affecting a 10 -year production for the Department of Treasury and the White House. Historically, they have worked to work with the feed,” the Chief Market Strategist of the Carson Group, Ryan Detrock told CNN. “The administration can only affect indirect production with financial policy and irregularities.”
The rates that Americans have paid on mortgage, credit cards and other types of loans are largely based on 10 -year treasury production. Although the monetary policy measures of the feed affect this, the production of 10 -year -old Treasury floats free, which means that many factors can lead to or down from the feed.
For example, during geographical political dispute times, investors buy more US debt, including 10 -year -old Treasury notes, especially at times of uncertainty, safe, stable for investment, assets Understanded Flights to security reduce production, which makes Americans cheaper.
As Basant pointed out in his Fox Business Interview, when in September, when the Fed deducted feed by an extraordinary half point, the 10 -year production should have fallen theoretically. However, it ended in a high motion. The matter remained after the feed cut rates last year.
Ever since Trump took power, 10 -year production has dropped slightly. Basant sees that as a reflection of traders, they recognize that if federal spending has been reduced, the US government’s debt is less at risk.
White House press secretary Karolway Lyvet said last week that the administration was moving forward with its plans for “eliminating the tremendous waste of federal funds”, which the so -called department headed by Tesla’s CEO Elon Musk. Partially facilitating through.
The Trump administration has said it is focused on increasing economic growth through “expansion” policies. His plan to batch government agencies and reduce costs can enable the development not to inflation, which positively affects the treasury.
“They want to make growth happy, but they also want to limit inflation expectations by showing some discipline on costs, and now more inflation due to the potential for re -indicating the inflation of goods. Expectations are in great danger. ” In interactive brokers, CNN told.
“In addition, focusing on the 10 -year production is that we have been gaining the freedom of monetary policy for so long, which should exclude any political influence. Recovering is a good example.
