Source: EconLog
by Jon Murphy
“Short version: no. … US Treasury interest rates are set in the market, not by the Federal Reserve. Like most prices (and an interest rate is a price), the rate emerges from the intersection of supply and demand. The rate is not set by the Federal Reserve. The Federal Reserve tries to influence rates through its monetary policy, but it does not set rates. If the Federal Reserve lowers its rates but the fundamental supply and demand in the marketplace does not change, neither will Treasury rates. It’d be like pushing on a rope: no matter how much you push, it’ll just coil in on itself.” (08/26/25)
https://www.econlib.org/will-the-fed-lowering-rates-reduce-government-borrowing-costs