"Fed Sounding Board": Biden's Latest Budget Shows Rates Won't Fall, Markets Shouldn't Overprice

On March 12, Nick Timiraos wrote that Biden expressed optimism at a campaign event last week that the Fed would soon cut interest rates. But his budget projections for the economy, released Monday, offer a different message: interest rates won't fall anytime soon, and the markets need to get a grip. "I can't guarantee it, but I'd bet that the little institution that sets interest rates will make a cut," Biden said last week. However, data on economic forecasts published in the White House's 2025 budget proposal show that three-month Treasury yields will average 5.1% this year, the same as in 2023, and are expected to fall to 4% next year and 3.3% in 2026.