The Government is not a monolith. The rates are driven by the Fed decisions, and the Fed is subject to a congressional Act that establishes a dual mandate (infl

The Government is not a monolith. The rates are driven by the Fed decisions, and the Fed is subject to a congressional Act that establishes a dual mandate (inflation and unemployment). The Fed does not care about the budget deficit, or at least not in a direct way, as they care about the inflation indicators (like CPI). The US Treasury does not care about the deficit either. They simply have to enact what the Congress says. If the Congress is ok with a $5 trillion deficit per year, the US Treasury will raise the required debt at whatever prevailing rates are out there. The Congress does not pass the budget bill in a vacuum, they start with a proposal coming from the Executive. So you have 4 actors, the Fed, the US Treasury, the Congress, and the President. Only the first one can manipulate the rates, and that one has only an indirect interest in how the long term debt of the Government looks like.