Donald Trump Demands Lower Interest Rates as Mortgage Costs Climb

US President Donald Trump demanded lower interest rates on Wednesday, criticizing Federal Reserve policymakers as average 30-year mortgage rates climbed to 7.49%—their highest level in nearly three years. Trump pointed to international trade surpluses in countries like Switzerland, Canada, and Mexico while arguing American borrowers should secure the lowest rates globally.

US President Donald Trump criticized the Federal Reserve’s policymaking board on Wednesday, demanding reductions in borrowing costs as the average rate on 30-year mortgages rose to 7.49% from 7.30% during the week ending Oct. 2, according to the Mortgage Bankers Association. The association attributed the climb in mortgage costs to rising Treasury yields and widening mortgage spreads driven by increased rate volatility, which also pushed overall mortgage applications down by 4.2%.

Trump Accuses Fed Board of Wanting Economy to Underperform

Speaking to reporters in the Oval Office, Trump singled out members of the Fed’s policymaking board, accusing them of wanting the United States economy to underperform. While praising Fed Chairman Kevin Warsh as great, Trump noted that Warsh represents only one vote among several policymakers, a group that includes appointees from former Presidents Barack Obama and Joe Biden.

Donald Trump Demands Lower Interest Rates as Mortgage Costs Climb

You have a board that would like to see the country do badly, in my opinion, because I think interest rates should come down.

Donald Trump, US President

Trump argued that the strength of the American economy and the role the United States plays in supporting other nations should entitle domestic borrowers to the lowest borrowing costs worldwide. He specifically pointed to Switzerland, Canada, and Mexico, asserting that their trade surpluses with the US benefit their respective economies while leaving Washington with deficits.

Trump Demands Lower U.S. Interest Rates, Calls For Rates Below 0.5%

Treasury Secretary Scott Bessent Links Yields to Growth and Energy Shock

Treasury Secretary Scott Bessent offered a different perspective on rising borrowing costs, describing them as global phenomenon and noting that the United States had maintained the best-performing 10-year bond market since Trump took office. Bessent argued that unlike other nations, higher US yields reflect real interest rates propelled by strong economic growth.

Addressing persistent inflation, Bessent explained that headline inflation remains elevated due to an energy shock, even though core inflation dropped during the previous month and is moving closer to the Fed’s established target. Once we get on the other side of this current conflict, the energy market is going to be well supplied, Bessent said, forecasting that both mortgage rates and 10-year Treasury yields will eventually decline.

Predictions for Oil Markets and Future Borrowing Costs

Building on expectations for the energy sector, Trump predicted that oil prices would drop sharply once the ongoing conflict with Iran concluded. It’s got to be very soon, one way or the other, Trump said, suggesting that crude prices could potentially fall below prewar levels.