On May 1, U.S. Treasury Secretary Basant stated in an interview that the U.S. Treasury market is signaling that the Fed should cut rates.

On the same day, Basant told Fox Business Channel, "We see that the two-year rate is now below the federal funds rate. Therefore, this is a market signal indicating that the Fed should cut rates."

As of 7:58 AM Eastern Time on the same day, the yield on the two-year U.S. Treasury note was 3.58%, while the benchmark federal funds rate was 4.33%. The Fed currently has the target range for the federal funds rate set between 4.25% and 4.50%.

The Fed has stated that there are currently no plans to cut rates, citing that the inflation rate remains above the 2% target and the risk of rising prices due to the Trump administration's tariff policies.

The Federal Reserve will hold its next interest rate decision meeting on May 7, and nearly all economists predict that the Fed will keep interest rates unchanged. Previously, Trump has repeatedly urged the Fed to cut rates.

U.S. Treasury Secretary Basant. Reuters

Basant also mentioned on the 1st that as time goes on and trade agreements are reached, the 'gaps' of tariff uncertainty will narrow. He stated that despite the stock market experiencing a sell-off in April, the final performance for the month was basically flat.

"The market completed an incredible round trip in April," Basant said. "When we reach our destination, the journey will be worth it, and in the short term, I think everyone should take a deep breath."

After three rate cuts in 2024, the Fed has kept rates unchanged this year due to rising inflation risks. Trump has expressed extreme dissatisfaction with the Fed, stating that Chairman Powell's reluctance to cut rates is 'playing politics.'

U.S. media recently reported that Trump has been discussing the possibility of dismissing Powell early for months, although such action has virtually no legal support.

(New York Times) Analysis points out that investors generally prefer low interest rates because low rates make it easier for businesses to borrow and expand. However, the market has recently declined following Trump's calls for rate cuts, indicating that investors believe the threat to the Fed's independence posed by rate cuts outweighs the benefits they may bring.

Reports indicate that the independence of the Fed is considered crucial in global financial markets, and threats to that independence cause investors to worry about the stability of dollar-denominated assets.$BTC #加密市场反弹