New disclosures show that President Trump has bought roughly $100 million of bonds since starting his term.
These purchases could gain from Fed rate cuts, benefiting Trump’s portfolio value.
The president has been pressuring the Fed for months to lower interest rates.
While President Donald Trump has grabbed headlines for his meme-stock holdings and forays into crypto, he’s also been steadily amassing a large stake in good, old-fashioned bonds.
This is according to a US Office Office of Government Ethics filing from August 19, which showed that Trump has made more than $100 million in bond purchases since starting his second term. The purchases span state, municipal, and corporate bonds with a wide range of maturity dates and yields.
While administration officials have said the transactions are managed completely independent of Trump, it’s still relatively unprecedented for an active president to be making these types of moves at all. He’s the first commander-in-chief in more than 50 years to not at least have personal holdings put into a blind trust while in office.
Given that bond prices normally rise when yields fall, any decline in the latter would increase the overall value of the president’s portfolio. Those yields are likely to decline if the Federal Reserve cuts rates — something Trump has not-so-subtly been imploring it to do for months.
A few caveats: The purchases make up a small portion of Trump’s net worth, which Forbes estimates at around $6 billion. It’s also unclear how Trump’s bond-purchase activity compares to previous periods when he wasn’t in office.
Overall, it’s difficult to know the exact degree to which Trump would benefit from reductions in the fed funds rate. The benchmark rate impacts short-duration yields the most, while factors like inflation impact longer-duration bonds more. Price action on long-duration bonds specifically in response to rate cuts can also be hard to measure because long-term rates can move in advance of cuts.
Trump has called for the central bank to slash rates by 300 basis points, to the 1.25%-to-1.5% range. He has repeatedly pressured Fed Chair Jerome Powell to cut rates. But Powell has run his own race and stuck to the Fed’s internal calculus, even going as far as to say the potentially inflationary effect of Trump’s tariffs was part of the FOMC’s decision to keep rates unchanged at recent meetings.
Trump’s bonds — and the bond market overall — may not have much longer to wait for another rate cut. Investors are currently pricing in an 84% chance of a 25-basis-point reduction at the September Fed meeting, following a weak July jobs report that saw large downward revisions.
For his part, Powell appeared to open the door to a September rate cut during remarks at last week’s Jackson Hole Symposium. Upon the release of his prepared statement, stocks soared instantly, while government bond yields tumbled.
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