Trump’s Fed nominee has revived a long-ignored “third mandate” for moderating long-term rates. Here’s why this could be great for crypto.
The U.S. Federal Reserve is known for its dual mandate. It is tasked with keeping prices stable and ensuring maximum employment.
However, an old clause in the Federal Reserve Act shows that the FED is tasked with a third goal that rarely gets attention.
It calls for “moderate long-term interest rates.”
Donald Trump’s nominee for the Fed Board, Stephen Miran, recently pointed out this forgotten mandate, and his remarks have set off debate among traders, analysts and policymakers.
How the Third Mandate Shapes Policy
The idea of controlling long-term rates has been ignored for decades. Economists viewed it as a natural byproduct of stable prices and strong employment.
Now, however, Trump’s team is pointing to it as justification for a change within the Fed.
With Fed board member Miran now confirmed, the MSM is preparing the world for the Fed’s “third mandate” which is essentially yield curve control. LFG!
YCC -> $BTC = $1m pic.twitter.com/jlPQZJ0cHm
— Arthur Hayes (@CryptoHayes) September 16, 2025
Some of the possible tools that can be used include large-scale bond purchases, Treasury bill issuance or direct yield curve control. All of these aim to push down yields on long-dated bonds.
Lower long-term rates would make it cheaper for the government to borrow, at a time when U.S. debt has climbed above $37 trillion.
Trump’s Push for Lower Rates
Trump has repeatedly criticised Jerome Powell and the Fed for being “too slow” in cutting rates. His administration wants lower borrowing costs, not just at the short end of the curve but across longer maturities.
JUST IN: 🇺🇸 President Trump says Fed Chair Jerome Powell has “been very bad for our country, we should have the lowest interest rate on earth.” pic.twitter.com/dtmNkPS7oo
— Watcher.Guru (@WatcherGuru) July 14, 2025
Treasury Secretary Scott Bessent has echoed this stance and has stressed the importance of reducing costs for homeowners and businesses.
He has even pointed to the Fed’s statutory mandate in defending possible market intervention.
Crypto Investors See an Opening
Meanwhile, supporters of digital assets are framing the third mandate as bullish for crypto. Christian Pusateri, founder of Mind Network, described it as “financial repression by another name.”
He argued that tighter control over money creates instability and makes Bitcoin a stronger hedge.
Arthur Hayes, co-founder of BitMEX, went further.
He noted that yield curve control could propel Bitcoin toward $1 million. While this may sound extreme, many crypto advocates believe that sustained dollar weakness will push capital toward decentralised assets.
Lessons from History
This would not be the first time Washington tried to hold long-term yields lower. During World War II, policymakers capped bond rates to finance the war effort.
In the 1960s, “Operation Twist” attempted to flatten the curve by buying long bonds and selling short ones.
More recently, the Fed bought massive amounts of Treasuries and mortgage-backed securities during the 2008 financial crisis and the pandemic. These programs expanded the Fed’s balance sheet and lowered long-term borrowing costs.
Risks for Bond Traders
For investors, the third mandate could be another source of problems. If Washington steps in to cap yields, traditional strategies may backfire.
Daniel Ivascyn of Pimco warned that traders betting against long bonds could face steep losses if the Fed becomes the “ultimate buyer.”
Some managers are already adjusting to it. Mark Spindel of Potomac River Capital has been buying short-term inflation-protected securities and is expecting both political interference and higher inflation. Others are cautious, however, and are waiting to see whether policymakers act or continue to rely on softer labour data to guide rate cuts.
Defining “Moderate”
One lingering question is what counts as “moderate” long-term rates. The 10-year Treasury yield currently hovers near 4 per cent, which is below the 5.8 per cent average since the 1960s.
By historical standards, that already looks moderate. Critics argue this shows the case for a new intervention.
Still, the administration seems to be determined. As Vineer Bhansali of LongTail Alpha put it, Washington sees manipulating long rates as “the only game in town.”