Allison Schrager, Columnist

Financial Repression Won’t Make Interest Rates Lower

The federal government’s various attempts to try to reduce borrowing costs are bound to fail.

June 6, 2025 at 9:00 AM UTC

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”

The market sets rates.
Photographer: Michael Nagle/Bloomberg

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The federal government, financial markets and most Americans are all in a state of denial about interest rates. Whenever someone goes on business TV, gets a mortgage or makes a long-term debt projection, I usually hear some variation of the phrase, “when rates go back down.”

I am sorry to be the bearer of bad tidings, but rates are not going back down, especially to the levels of the 2010s. And almost any attempt to try to force them down — what we economists call financial repression — will only bring pain.