US Treasury Proposes Decade-Long Foreign Debt Purchase Commitment

The Biden administration is considering a novel trade policy that would require foreign governments, like Japan, to commit to long-term purchases of U.S. Treasury securities as part of trade negotiations, aiming to support Treasury markets amid rising deficits and interest costs. Meanwhile, the Federal Reserve is expected to maintain its benchmark interest rate steady at 4.25% to 4.5% for the fifth consecutive meeting despite President Trump's pressure on Fed Chair Jerome Powell to aggressively cut rates, as the Fed carefully monitors inflation and economic growth impacts from tariffs. Economic data shows a slight increase in inflation, with consumer prices rising, which influences Fed decisions that affect loans, savings, and investments. In the commercial lending sector, a recent survey revealed a modest decline in borrowing appetite due to economic uncertainty and inflation concerns, although demand remains relatively robust with property purchases leading borrowing purposes. U.S. economic growth rebounded strongly in the second quarter of 2025, with job creation picking up and inflation remaining relatively stable despite earlier concerns about tariffs driving prices higher. These developments suggest a complex economic environment where fiscal policy, monetary decisions, and trade strategies are all interacting amid ongoing global and domestic challenges.