US President Donald Trump demanded lower interest rates Wednesday, criticizing the Federal Reserve after the average rate on 30-year mortgages climbed to its highest in nearly three years.
Responding to a question about mortgage rates reaching 7.49%, Trump accused members of the Fed's policymaking board of wanting the country to perform poorly.
Trump called Fed Chairman Kevin Warsh "great" but added that he was only one vote among several policymakers, including appointees of former Presidents Barack Obama and Joe Biden.
"You have a board that would like to see the country do badly, in my opinion, because I think interest rates should come down," he told reporters in the Oval Office.
Trump argued that American economic strength and the role that the US plays in supporting other countries should secure the lowest borrowing costs worldwide.
"Our interest rate should be the lowest. We should pay lower than any other country," he said.
He singled out Switzerland, Canada and Mexico, arguing that their trade surpluses with the US benefit their economies while leaving Washington with deficits.
Treasury Secretary Scott Bessent described rising borrowing costs as a "global phenomenon," saying the US had been the best-performing 10-year bond market since Trump took office.
Unlike other countries, he argued, higher US yields reflected real interest rates driven by strong growth.
Bessent said headline inflation remained high because of the energy shock, while core inflation declined last month and was approaching the Fed's target.
"Once we get on the other side of this current conflict, the energy market is going to be well supplied," he said, predicting that mortgage rates and 10-year Treasury yields would decline.
Trump also said oil prices would "drop like a rock" once the war with Iran ended.
"It's got to be very soon, one way or the other," he said, suggesting prices could fall below prewar levels.
The Mortgage Bankers Association reported Wednesday that average 30-year mortgage rates rose to 7.49% from 7.30% in the week ending Oct. 2, while applications fell 4.2%. It attributed the higher rates to rising Treasury yields and widening mortgage spreads amid increased rate volatility.
