Trump induced interest rate cut will not really reduce mortgage rates

• A printed interest rate cut In fact, it will not reduce mortgage rates. He can reflect, and said an economist. If there is any suspicion of the independence of the Central Bank, whether it is politically neutral, whether it is loyal to dual and maximum employment, it may result in more chaos in the bond market. This is probably possible to push prices in the 10-year treasury and increase mortgage prices.

Exchange prices have made a spiral after presenting a sweeper tariff regime of “Freedom Day” of the “Day of Liberty.” But it appeared sell bonds drew his attention (although reject this) and put it slightly Tariffs in the ice. It sells, as well as the longer term productivity and Lucky Chatter writeTrump is interested in the exchange rate on 10 years of treasury bonds, as it affects mortgage rates, and he promised to promise America to make it suitable again.

President called the Central Bank to strike interest rates again and again, but caused a white house cut the price Maybe it can do something that he didn’t want: push the mortgage rates up.

“The president, which puts this pressure on the Fedin, would not reach the target, when the mortgage ratios were low,” said Redfin Economic Research President Chen Zhao Fortune. The White House immediately did not meet the desire to comment.

Trump on April 21 stationed In social media, on social media, inflation has already reduced interest rates to stop someone slow because it is no problem for him. The Fed President Jerome Powell called “Mr., late” and “a great loser”. Days have previously placed the Trump O Powell termination could not come fast enough, but since today changed his melody. Still, Trump wants to lower interest rates. The same moment said he did not intend to shoot Powell, he said: “This is a perfect time to reduce interest rates.”

However, the interest rate cut is not really responded to the low mortgage rates and can worsen a pressure cutting. Higher mortgage prices for an apartment world that are currently standing should not be a surprise that will not be good. Home sales After the great financial crisis, many people are not far from the visible levels, because many people are buying or sold. Buyers will not be able to get home prices and high mortgage prices are so high and sellers do not allow sellers not want to lose very low mortgage rates.

The speed of the Federal Funds does not connect to direct mortgage rates. This is more than ordinary due to 10 years of treasury mortgage rates and two spreads between the two, resulting in tariff volatility recession callInflation is frightened and slowly anxious. Fed, tariffs are in anticipation and visual mode because inflation and slow consumer expenses and business investments. Again, Trump’s comments on the Fed and his chair have led to discussions on the connection between the White House and the Central Bank.

“If we think that if we think that there is a danger to ease independence, another point in the chaos is another point in the United States,” Zhao can push prices in the 10-year treasury and mortgage prices will increase.

“There is this concept you can force the Fed’s cut, if they do, the mortgage rates are mechanically, but this is just what happens.” “Fed only for managing the ratio of a nutritated funds. Everything else is determined by the markets.”

If the Central Bank is forced to force investors and therefore, they will not see the Fed as a political neutral. The dual mandata loyalty to implement the lack of confidence and fixed prices and maximum employment can cause a sale in the bond market, and the fertility can send the steering wheel. Moreover, investors can ahead of a remarkable economy with a degraded economy, especially high inflation and stagnant growth. It will push long-term interest rates, as long-term rates are related to the price of the bond market because it is a large place.

Fed, before cutting the main percentage of interest in September 2024, the pandemic period inflation was closed, mortgage rates fell. They roar cutting a ratio, more than cuts. Something similar happened before the President’s election victory: vigilance Trump Win’s mortgage rates earned because people will come with hot more hot inflation that people bet on a second term.

One research Post-cut, a Fannie mae The elderly economic analyst wrote that the rate of federal funds is the interest rate that banks pay each other overnight: short-term interest rate. On the other hand, mortgage rates are long-term rates set in the bond market. 30-year-old mortgage rate is considered a proportion of 10 years of the 10-year treasury note, which is determined by the expectations of investors, followed by analytical, 10-year treasury notes of mortgage rates. Aside Note, The chief economist of Richmond Fed tends to increase sharply during the distribution and mortgage rate between the 10-year treasury.

Fed, if next month will cut interest rates in the next session (after Powell) notier Trump tariff diary can do anything in stagflation period and stored careful approach to monetary policy) can send a message to bond investors.

“Markets can say well, it will be so bad in the future … The patient will be so sick, we need to apply more medications,” Zhao said. “If this happens, it means that we really need to get a lot more than we don’t want too much.”

This story was first displayed Fortune.com

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