Elon Musk says Americans are about to pay less for everything—from mortgages to business loans—all thanks to D.O.G.E.
“As it becomes clear that D.O.G.E is working, you will see the long-term Treasury bill yields fall. And all Americans will benefit from lower interest payments on mortgages, small business debt, credit card and other loans,” Elon posted on X today.
His claim comes as the Federal Reserve delays rate cuts, inflation stays stubborn, and long-term Treasury yields spike. But the bigger fight? Elon’s Department of Government Efficiency (D.O.G.E) is locked in a war with the US Treasury, federal courts, and state attorneys general over its role, access, and power.
D.O.G.E vs. US Treasury: A fight over money and power
On February 11, a federal judge blocked D.O.G.E from accessing a key Treasury Department payment system. The ruling followed a lawsuit filed by attorneys general from nineteen Democratic states who argued that Elon’s operation had no legal authority to access government financial records, with alleged concerns of privacy and regulatory breaches to the American people.
Elon’s critics say he’s running an unelected financial task force with no oversight. They warn that giving him access to Treasury records could disrupt critical payments and expose millions of Americans’ financial data.
Treasury officials insist D.O.G.E only has “read-only” access, meaning no payments have been altered, blocked, or delayed. They also confirmed that Tom Krause, an Elon associate, is reviewing Treasury payment systems alongside veteran career officials. But that hasn’t stopped the lawsuits or the political firestorm.
Trump, backing Elon, signed an executive order forcing all federal agencies to coordinate with D.O.G.E to slash government spending. The order led to widespread budget freezes, program cuts, and legal challenges questioning whether Elon’s group had any constitutional legitimacy.
Treasury yields surge, Fed delays rate cuts, inflation remains high
Elon’s claim about lower interest payments comes at a time when Treasury yields are rising fast. The 10-year Treasury yield jumped 11 basis points to 4.651% after a hotter-than-expected inflation report. The 2-year yield climbed 8 basis points to 4.37%.
Earlier today, the Bureau of Labor Statistics reported that the consumer price index (CPI) increased by 0.5% in January, pushing the 12-month inflation rate to 3.0%. Economists had expected lower numbers. Core CPI, which strips out food and energy, rose 0.4% for the month and 3.3% year over year, also above estimates.
Market expectations for a Federal Reserve interest rate cut in June collapsed after the report. Futures markets now predict the earliest cut won’t come before September—if it happens at all this year. “The Fed will see January’s hot inflation print as confirmation that price pressures continue to bubble beneath the economy’s surface,” Bill Adams, chief economist at Comerica, said.
Fed Chair Jerome Powell told the House Financial Services Committee that inflation is improving but not enough. “We’re not quite there yet. So we want to keep policy restrictive for now,” he said.
One of the biggest drivers of high Treasury yields? Deficit spending. At least 150 basis points of premium are priced into the 10-year Treasury yield due to government borrowing. Elon and his team believe cutting government spending will bring rates down naturally. “Eliminate deficit spending and rates go down for Americans,” Elon said.
Anyway, Wall Street is now looking ahead to the personal consumption expenditures (PCE) index, the Fed’s preferred inflation gauge. Citigroup predicts core PCE will drop to 2.6% for January, a slight decline from December’s 2.8%. If the number comes in higher, the Fed may push rate cuts even further into the future.
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