Scott Bessent Said Interest Rates Have Fallen During Trump’s Second Term. Here’s Where He’s Right – and Where He’s Wrong.

U.S. Treasury Secretary Scott Bessent recently stated that interest rates have fallen since President Donald Trump's second term inauguration in 2025. However, this claim is partially accurate and misleading when looking at the broader picture. Short-term rates, such as Treasury bills and money market instruments, have indeed decreased due to Federal Reserve interest rate cuts and the Treasury's focus on short-dated debt issuance.

This has led to lower borrowing costs for the government. In contrast, long-term yields, including those of the 10-year and 30-year Treasury bonds, have risen significantly since 2025, with the 30-year yield nearing 19-year highs around 5.2%. This trend, known as a yield curve steepening, indicates that the broader economy, which relies on long-term borrowing, is facing higher costs.

Therefore, while short-term borrowing costs have declined, long-term borrowing costs have increased, impacting consumers and businesses that depend on low borrowing rates. Bessent's statement oversimplifies the Treasury's complex messaging and downplays the significant impact of long-term interest rate movements on the overall economy.