"ANALYSIS: President Trump is blaming Jerome Powell and the Fed for the housing downturn, but economists from JP Morgan and Morgan Stanley say today's high mortgage rates aren't the Fed's doing-it's the legacy of keeping rates ultra-low for years after the financial crisis, which inflated home prices and left affordability shattered. Despite multiple Fed cuts, mortgage rates remain stuck because lenders are largely ignoring monetary policy amid tight housing supply, pandemic-era buying, and a decades-high spread between policy rates and mortgage offers."
"A housing crisis is the stick the White House has selected to beat Fed chairman Jerome Powell with. "Could somebody please inform Jerome 'Too Late' Powell that he is hurting the housing industry, very badly?" the president wrote on Truth Social earlier this year. "People can't get a mortgage because of him." Elsewhere, Trump's housing chief called Powell a "maniac," and Treasury Secretary Scott Bessent placed the blame for a property squeeze at the Fed's feet."
President Trump blames Fed chair Jerome Powell for harming the housing market and ties high mortgage costs to Fed policy. Economists at JP Morgan and Morgan Stanley attribute current elevated mortgage rates to the legacy of prolonged ultra-low policy rates after the financial crisis that inflated home prices and damaged affordability. Lenders have largely ignored recent Fed cuts amid tight housing supply, pandemic-era buying, and a decades-high spread between policy rates and mortgage offers. Despite 125 basis points of cuts since September 2024, mortgage rates remain around 6.2%, and market dynamics limit the Fed's direct influence on mortgage pricing.
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