The article discusses President Trump's consideration of releasing Freddie Mac and Fannie Mae from conservatorship, highlighting potential risks associated with rising mortgage rates. Treasury Secretary Scott Bessent indicates that if such a move is expected to elevate rates, it won't proceed, especially with midterm elections and trade challenges on the horizon. Current high rates are crucial for homebuilders, affecting construction and sales, which are vital economic indicators. The author emphasizes the need to monitor trends in the housing sector as they could signal impending economic downturns, particularly given recent decreases in labor in residential construction.
Bessent emphasized that the Trump Administration would not consider releasing Freddie and Fannie from conservatorship if it risks causing higher mortgage rates.
Monitoring residential construction trends is crucial, as a downturn in this sector often signals the economy may be heading towards recession.
The current housing data, specifically builder confidence and high mortgage rates, could severely impact the overall economy as midterm elections approach.
Trump recognized that lower mortgage rates have historically supported economic performance, even amid inflation and rising lumber prices.
Collection
[
|
...
]