Some evidence of prudence will surely reassure investors

America’s leaders have latched onto the idea that they can address some big problems — most notably a gaping budget deficit — by forcing interest rates downward. If only it were that easy.

- Bill Dudley, Tribune News Service

President Donald Trump keeps turning up the pressure on the Federal Reserve to lower short-term rates, publicly expressing his dissatisfaction with Chair Jerome Powell. Treasury Secretary Scott Bessent wants to reduce longer-term rates by issuing less long-term US debt. Financial regulators are tweaking capital requirements, encouraging the largest U.S. banks to buy and hold more Treasury securities, which would push prices up and yields down.

If these efforts worked as intended, they could deliver significant benefits. If interest rates were a mere percentage point lower than the Congressional Budget Office's current projections, the government could save about $3.5 trillion in debt-service costs over 10 years — not far from what the One Big Beautiful Bill Act that just passed Congress is expected to add to the federal budget deficit over the same period.