Trump Pressures Fed's Warsh to Cut Rates as U.S. Interest Costs Top $1 Trillion
Updated
Updated · The Washington Post · Sep 6
Trump Pressures Fed's Warsh to Cut Rates as U.S. Interest Costs Top $1 Trillion
3 articles · Updated · The Washington Post · Sep 6
Summary
Trump renewed pressure on Fed Chair Kevin Warsh to cut rates Friday, saying he would halt trade with deficit countries if the Fed does not ease.
10-year Treasury yields hit their highest since January 2025 last week as investors demanded more return amid persistent inflation fears, heavy AI capital demand and widening government deficits.
U.S. debt now equals 122% of GDP, and annual interest costs have climbed above 3.2% of GDP; this year they are projected to exceed $1 trillion.
Warsh signaled at Jackson Hole that a rate hike may be ahead to contain inflation above the Fed's 2% target, setting up a clash with Trump that analysts say could unsettle Treasury markets.
The pressure comes as debt strains spread globally—Japan's 10-year yield is at a 30-year high—and analysts warn growth alone will not fix U.S. deficits without spending cuts or tax increases.