KKR Group stated that the Trump administration is calling for a significant interest rate cut by the Federal Reserve. Combined with the prospect of increased issuance of short-term bonds in the United States, it may disrupt the bond market and ultimately push up long-term borrowing costs.

Jason Thomas, Global Head of Research and Investment Strategy at KKR Group, said: "Bond holders hope to believe that the Federal Reserve's duty is to maintain the real value of their principal. If they instead feel that the Federal Reserve is more concerned with government financing, there may be situations where bonds are sold off and term premiums rise." The core issue is that Trump continues to pressure Federal Reserve decision-makers to lower benchmark interest rates to stimulate the U.S. economy - a move that would also pave the way for the Treasury Department to shift towards issuing short-term Treasury bonds instead of locking in long-term debt in the current high-yield environment to save on interest expenses. U.S. Treasury Secretary Mnuchin has proposed this idea in recent months.