There's another big reason why Trump could blame the Federal Reserve for rising interest rates•President Trump has criticized the Fed for raising interest rates in a period of low inflation, but it's another Fed policy move that is helping drive interest rates higher.
•The Fed is unwinding its balance sheet, which ballooned during the financial crisis, and in the process is buying less Treasury securities, just as the federal government is issuing much more debt.
•The fact the Fed has stepped back as a buyer, combined with the increased debt issuance, has been a topic of discussion in the bond market as interest rates were on the rise this month.Patti Domm | @pattidomm
Published 20 Hours Ago | Updated 17 Hours Ago
CNBC.comPresident Donald Trump has been unabashedly vocal in his criticism of the Fed's interest rate hikes, but the president has been quiet on another important Fed policy that may also be a big factor behind the rise in longer-term rates that influence all sorts of loans, including home mortgages.
On the surface, the Fed's slow and steady approach to raising short-term interest rates once a quarter is less aggressive than it's been in past cycles. But it's the the Fed's parallel balance sheet moves that have gone under the radar, except in the bond market where it is closely monitored.
That's because the Fed has stepped back as a buyer in the Treasury market, at a time when the Federal government is also issuing a mountain of new debt. Since last year, the Fed has been gradually reducing the purchases it makes to replace Treasury and mortgage securities on its balance sheet as they mature.
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https://www.cnbc.com/2018/10/12/one-big-reason-why-trump-can-blame-the-fed-for-rising-interest-rates.html
