In an all-encompassing interview with Bloomberg, U.S. Treasury Secretary Scott Bessent emphasized the Trump administration’s strategic focus on maintaining low 10-year Treasury yields. This approach marks a significant shift in economic and fiscal policy, which previously focused almost exclusively on pushing the Federal Reserve to cut its benchmark interest rate.U.S. Federal Reserve Board Chairman Jerome Powell has overseen 100 bps in Fed rate cuts since Sep … [+] 2024. 10-year Treasury yields have risen dramatically in the same period. (Photo by Drew Angerer/Getty Images)Getty ImagesSince the Fed began cutting interest rates in September 2024, 10-year Treasury note yields spiked from 3.6% in September to almost 4.8% in January. In the month since the last Non-Farm Payrolls report and the change in administration, yields have rallied by 30 basis points (bps), signifying increased demand.
Since taking office in January, the Trump administration has taken significant steps to demonstrate a commitment to strengthening U.S. leadership in innovating financial technologies. His crypto-focused executive order aims to establish regulatory clarity for digital assets and secure America’s position as a global leader in the digital asset economy.
Sen. Tim Scott, R-S.C. led Senate Banking Committee hearings on the practice of debanking. Hours … [+] prior, the FDIC released documents cautioning banks to “pause” activities with crypto-related companies and people. (AP Photo/Ben Curtis)Copyright 2025 The Associated Press. All rights reservedOver the past week, the Senate Banking Committee and the House Financial Services Committee held hearings on the aggressive enforcement actions and regulatory overreach during the Biden Administration. Commonly referred to as Operation Choke Point (OCP) 2.0, industry experts testified about how OCP 2.0 stifled innovation and growth in crypto and other “politically disfavored industries,” by providing little or no regulatory guidance and requests to “pause” banking activities with crypto companies, resulting in debanking.
Regulatory and legislative policy measures that foster innovation in digital financial technologies could work in tandem with fiscal policy to pave a path toward a more efficient U.S. financial system with positive implications for consumers.
The Role of Fiscal Policy
SecretaryScott Bessent, US treasury secretary, right, during an interview at the Treasury Department in … [+] Washington, DC, US, on Thursday, Feb. 6, 2025. Bessent discussed a focus on 10-year note yields, not the Fed Funds rate. Photographer: Stefani Reynolds/Bloomberg© 2025 Bloomberg Finance LPBessent’s comments highlight the importance of long-term interest rates in driving economic stability and growth.While the mainstream financial press focuses much of its attention on the U.S. stock market, the 10-year Treasury note is a cornerstone for the whole U.S. financial system.The 10-year Treasury note yield is the benc