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● LIVE Updated 1h ago · 8 sources tracked

Fed should defy Donald Trump with rate rise, top economists say

Top economists argue the Federal Reserve should raise interest rates to resist pressure from Donald Trump. This comes as the 10-year Treasury yield reaches its highest level since 2007 and the bond market shows extreme short counts betting on a hike. While some suggest a 50bp increase would be a strong statement, others warn that the biggest risk to the sinking bond market is the Fed choosing to stand pat. The central bank is expected to hike rates to combat rising prices.

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  • ✓ The 10-year Treasury yield has hit its highest level since 2007.
  • ✓ The Federal Reserve is expected to raise interest rates due to rising prices.
🛡️ Source Corroboration: 8 independent reporting domains (80% confidence) ⏱ Read time: ~2 min

What changed

Economists are now explicitly calling for a rate hike to defy Donald Trump amid record Treasury yields.

Live updates

  1. Economists Urge Fed Rate Hike to Defy Donald Trump

    Top economists argue the Federal Reserve should raise interest rates to resist pressure from Donald Trump. This comes as the 10-year Treasury yield reaches its highest level since 2007 and the bond market shows extreme short counts betting on a hike. While some suggest a 50bp increase would be a strong statement, others warn that the biggest risk to the sinking bond market is the Fed choosing to stand pat. The central bank is expected to hike rates to combat rising prices.

    Why it matters

    The Federal Reserve's independence is under scrutiny as it balances inflation control against political influence. Bond market volatility currently reflects high expectations for monetary tightening. The 10-year Treasury yield serves as a benchmark for global borrowing costs.

    What is confirmed

    • The 10-year Treasury yield has hit its highest level since 2007.
    • The Federal Reserve is expected to raise interest rates due to rising prices.

    Still unconfirmed

    • Scott Bessent stated that the bond market has taken down more governments than howitzers.

    What to watch next

    • The official Federal Reserve rate decision announcement
    • Market reaction to the size of the rate hike
    • Statements from Fed officials regarding political independence
    Sources used for this update (9)
    1. Fortune — 'The bond market has taken down more governments than howitzers': Scott Bessent cuts Kevin Warsh some slack ahead of anticipated rate meeting
    2. Bloomberg.com — Bond Market’s ‘Extreme’ Short Counts on Fed to Deliver Rate Hike
    3. CNN — 10-year Treasury yield hits highest level since 2007 ahead of Fed rate decision
    4. ING Think — Rates Spark: How about a 50bp hike? Now that would be quite the statement
    5. Reuters — Biggest risk for sinking bond market is Fed standing pat
    6. Financial Times — Fed should defy Donald Trump with rate rise, top economists say
    7. www.usatoday.com — Interest rate decision live: Fed expected to hike rates as prices rise
    8. markets.ft.com — FTSE EPRA Nareit Global REITs USD Total Return Index
    9. markets.ft.com — S&P Kensho Global Quantum Computing Technologies Index (USD) TR
    confidence 80%
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