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Lutnick expects U.S. interest rates to stabilize and decline over the next six months

🏛️ U.S. Commerce Secretary Howard Lutnick said he expects interest rates to stabilize before beginning to fall over roughly the next six months, adding that he is not overly concerned about the recent rise in Treasury yields.

📊 Lutnick argued that GDP growth above 3% and tariff revenue potentially approaching $400 billion annually could help narrow the fiscal deficit, supporting the bond market and lowering borrowing costs.

📈 Market pricing, however, remains tilted toward tighter policy. The 10-year Treasury yield recently touched 4.818%, while the probability of a 25-basis-point Fed rate hike in September is around 70%.

🛢️ Brent crude near $95 per barrel is also adding to inflation risks, leaving the outlook for lower rates uncertain. Lutnick’s comments currently reflect the administration’s fiscal outlook more than a clear signal that the Fed is preparing to reverse course.

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