Interest rates at the short maturity end are indeed under Fed control.
At the longer term maturities of years, out to 30 years, the Fed does not control these rates.
To a large extent, neither does the free market.
Nearly every institution in the world, pension funds, mutual funds of all kinds, more or less every trust fund — they have bylaws that require them to have a % of holdings placed in zero risk instruments. These are pretty much always required to be US government instruments. And so since they are required to buy them, this is zero discretion demand for them. Zero discretion is not the stuff of the free marketplace.
The accumulated $37 Trillion in US debt is scattered across maturities. The composite interest rate that defines interest on the national debt is about 3.3% — and growing. It is growing because short term dept is now 4.5% and long term is 4.7%. So as instruments mature, they must be rolled over (replaced) with the same instrument (meaning if a 5 yr note matures, you must buy another to hold the account constant). But the same instrument now has a higher interest rate than it did 5 years ago. And so the 3.3% composite rate rises.
Oh, and a freeper above. There will be no significant tax cuts that are not offset with some other quiet maneuver to avoid an instantaneous revenue fall. Yes, Yes, I know it is popular to believe that tax cuts increase revenue. Whether that is true or not, it doesn’t happen in month 1 or even year 1. We can’t afford to double the deficit in year 1.
So Trump’s only true leverage is on long term debt, by way of pressuring Congress to spend within their means? IOW, if some national debt is retired, not rolled over, then some of those “zero discretion” notes aren’t renewed. The institutions that “must” hold these now more scarce notes have to take what they can get - the note issuer (us) has the advantage and will re-price them for a lower return, a lower interest rate?
But Trump does not seem keen on lowering the national debt. Puzzling.
The Treasury has been financing at short term rates for the last 4 years and we have to roll over something $10 to $15 Trillion on debt this year, plus sell new debt, so lower rates might not work.