President Donald Trump singled out Switzerland for its low interest rates when asked whether the administration had done enough to stabilize the bond market after 30-year Treasury yields surpassed a two-decade high this week.
“I think it is, but I mean, it’s very sad,” Trump told the Washington Examiner on Wednesday. “Every time we do great, we announce great numbers, the interest rates go up, and they go up because they want to stop inflation. They should go down because the country’s strong. You know, I see countries like Switzerland, where they have the No. 1 lowest interest rates, a half a percent, and we pay 3.5%.”
Yields on benchmark 10-year U.S. Treasury securities have hit near 4.7% in recent days. Yields on 30-year securities rose as high as 5.31% this week, the highest since 2007.
During an event in the White House‘s Roosevelt Room before the Commodity Futures Trading Commission’s first Innovation Advisory Committee meeting this week, Trump also told the Washington Examiner that he retained the “absolute right to cut off all business with a country like Switzerland.”
“I don’t want to single them out because there’s 60 countries like that,” he said. “They live off the United States, so why are we paying higher interest rates than them? You know, in the old days, we used to pay the lowest interest rate, no matter how we were doing, because we sort of generate for the whole world.”
The Federal Reserve, led by Trump-nominated Chairman Kevin Warsh, is seen as increasingly unlikely to raise its interest rate target at its September meeting. The market is decreasing the chance of a rate hike to 56%, down from 82% immediately after the Fed’s July meeting, according to the Atlanta Fed’s Market Probability Tracker.
“I think he’s doing a great job,” Trump said of Warsh. “The problem is he has a board, and it’s a political board. People put in by Obama, Biden, and me, and there are quite a few members still left, as you understand, and so they vote to raise interest rates. I don’t know if they’re doing it because they think they’re doing a good thing or because they like the politics of it. But my point is, years ago, 25 years ago, when the country announced good numbers, interest rates went down because we had a stronger country.”
Trump added that the Fed should drop interest rates because “it’s all based on credit, meaning good credit, and we have the best credit, and we pay off the debt very easily, very quickly.”
The recent rise in yields for U.S. government securities reflects, in part, investor expectations for higher inflation and more government debt.
The U.S. amassed $40 trillion in national debt on Wednesday, five months after reaching the $39 trillion watermark, according to the Treasury Department.
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“I think we have a very powerful country, and we’re powering through these ridiculous interest rates,” Trump said before referring to his Innovation Advisory Committee. “We have the hottest country in the world, and these people are helping us a lot.”
The Treasury Department announced Wednesday that it would increase the size of its government debt repurchases by “at least double” from next month.