Mortgage rates could be on the way up after the president lashed out at the Fed chair agian
The yield on the 10-year US Treasury note rose Monday as financial markets responded to renewed criticism by President Donald Trump targeting Federal Reserve chair Jerome Powell, raising investor uncertainty about future monetary policy.
The benchmark yield climbed eight basis points to 4.409%. In contrast, the 2-year Treasury yield dipped by 3 basis points to 3.764%. Bond prices and yields move inversely, and the 10-year yield is a key indicator of where US mortgage rates are headed.
The sharp uptick came after Trump posted a blistering message on Truth Social, labeling Powell a “major loser” and pressing him to reduce interest rates immediately. “With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote.
In the wake of Trump’s remarks, broader markets reacted sharply. US stocks experienced sell-offs, while the dollar surged to its highest level in three years. Gold, traditionally viewed as a safe-haven asset, spiked to a record high above $3,400 per ounce.
“President Trump’s increasingly confrontational posture against Fed chair Jerome Powell makes investors wonder if the central bank’s inflation mandate will go out the window during his term,” José Torres, senior economist at Interactive Brokers, told CNBC. “The perception of an incremental shift toward allowing elevated price increase rates is clouding the fundamentals of global safe-haven assets.”
Last week, Powell warned that the administration’s trade tariffs could pose a dual threat to the economy—fueling inflation while slowing growth. The Fed chair’s comments came amid escalating speculation that Trump and his team were exploring whether Powell could be removed from his post. White House economic adviser Kevin Hassett confirmed that legal options were under review.
“If we had a Fed chairman that understood what he was doing, interest rates would be coming down, too,” Trump said on Friday during a session with reporters.
As investors seek clarity on the direction of US interest rates, the Fed’s next moves—and its relationship with the White House—are likely to remain under intense scrutiny.
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