President Donald Trump has renewed his attacks on the Federal Reserve after the central bank hiked its benchmark interest rate on Wednesday. Yet economists say the Fed matters less than broader economic trends when it comes to longer-term borrowing costs. The central bank sets short-term rates directly, but the longer-term rates that shape mortgages and corporate borrowing are priced in bond markets, where investors weigh growth, inflation, and the sheer volume of government and private borrowing.

The U.S. economy is growing steadily despite repeated shocks — and may even be accelerating — while inflation remains stubbornly high. At the same time, major technology companies are borrowing huge amounts of cash to plow into data center construction, and the federal government continues to run large yearly budget deficits. Analysts say all of these trends point to higher interest rates regardless of what the Fed does.

The result is the end of the low interest-rate, low-inflation world that lasted for nearly 15 years after the Great Recession, replaced by a higher-priced, higher-rate environment. Mortgage rates fell into the 3% range in the 2010s and dipped even lower during COVID-19, but such deals are long gone. The average 30-year mortgage rate reached 6.95% last week, the highest in more than a year and a half. For households, the shift is concrete: anyone financing a home today is borrowing at more than double the rate buyers could get in the 2010s.

Joe Brusuelas, chief economist at RSM, a tax consulting firm, said a major driver of the change is the shift from the pre-pandemic economy — in which consumer and business demand was weak — to the current economy, where healthy consumer and business spending is colliding with supply shocks and bottlenecks. Higher oil and gas prices stemming from the Iran war have added to the pressure, while the AI buildout has struggled with an insufficient supply of computer chips, electronic equipment, and the workers needed to put it all together.

“We’ve undergone a structural transformation of the economy,” Brusuelas said. “The regime change in inflation and interest rates is the outcome.”

In many ways, the shift returns the economy to where it stood before the financial crisis that began in December 2007 and lasted through June 2009. But even after the downturn ended, consumer and business spending remained weak. Millions of Americans spent the 2010s paying down outsized mortgages and credit card debt, businesses saw few investment opportunities, and big tech firms such as Alphabet’s Google and Meta’s Facebook piled up cash.

Now those companies are deploying those stockpiles to build out AI data centers — and borrowing even more money to do so. American consumers, despite surveys finding they are pessimistic about the economy, are still spending at a healthy pace. A recent report showing retail sales picked up last month led economists at Bank of America to forecast growth reaching a healthy 3% at an annual rate in the July-September quarter.

Federal Reserve Chairman Kevin Warsh highlighted the shift in a speech at the central bank’s annual conference in Jackson Hole, Wyoming, last month. After 2008, “it was a widely held view that an excess of capital would sit on the sidelines for a long, long time, because there just wouldn’t be enough compelling investment opportunities,” Warsh said. “All the good stuff had been invented. So growth would be low and slow.”

“Well, times sure have changed,” he continued. “Ever-expanding pools of capital are pouring into AI-related infrastructure of all sorts.”

The additional spending and investment has contributed to higher longer-term interest rates on government bonds competing for lenders. The yield on the 10-year Treasury bond topped 5% this year for the first time since 2023 — even before the Fed raised its benchmark short-term rate on Wednesday. With the federal government already running large yearly deficits, those higher yields also mean a steeper bill for servicing the national debt.

At the same time, political polling and consumer sentiment surveys continue to find that many Americans are struggling to keep up with rising prices, and affordability remains a top concern heading into the midterm elections. Even as the economy expands, inflation has outpaced the annual growth in average wages for the past five months — making the gap between pay and prices, the 10-year yield, and mortgage rates the key markers to track as the new environment takes shape.

Brusuelas said the U.S. economy’s expansion is “imbalanced,” with growth “entirely dependent” on the AI buildout and strong spending by wealthier consumers, who have benefited from rising stock prices driven by hopes that AI will lift profits.

After the Fed lifted its rate to 3.9% on Wednesday, Trump said on Truth Social that U.S. rates should be 1% instead. Yet many of Trump’s policies have contributed to higher borrowing costs — in particular the Iran war, which has driven up gas prices. When inflation persists, investors demand higher interest rates on longer-term Treasury bonds, such as the 10-year, which strongly influences mortgage rates.

“The president can say he wants interest rates lower all he wants, and yet he continues to push the button on all the policies that raise rates,” said Elizabeth Pancotti, vice president of policy, advocacy and research at the progressive Groundwork Collaborative.

This story was originally featured on Fortune.com.