That Fed Chair is a Jerk. If he would lower the rates more people would and could senter the housing market. It would also help on the housing shortage. No wants wants to sell their house with a 3% rate and go buy at 7%. It doesn't take a Fed Chair to figure that out. A Caveman can get it.
The Fed Chair’s Stubborn Rates Are Crushing the Housing Market
The Federal Reserve’s stubborn refusal to lower interest rates is strangling the housing market, worsening the housing shortage, and locking millions of Americans out of homeownership. Current Fed Chair Jerome Powell seems oblivious to the pain his policies are causing—or worse, he simply doesn’t care. While economists and policymakers debate complex inflation metrics, the reality is simple: high mortgage rates are freezing the market, and only a caveman wouldn’t see it.
The Housing Market is Paralyzed
Right now, the average 30-year fixed mortgage rate is hovering around 7%, more than double what it was just a few years ago. This has created a bizarre standoff in the housing market:
- Homeowners won’t sell because they’re locked into ultra-low 3% mortgages from the pandemic era. Why would anyone trade a 3% rate for a 7% one?
- Buyers can’t afford to buy because high rates have made monthly payments unmanageable, even if home prices stabilize.
- Builders aren’t building fast enough because high financing costs slow construction, worsening the supply crisis.
This gridlock means fewer homes are changing hands, inventory remains near historic lows, and prices stay high. The Fed’s insistence on keeping rates elevated isn’t just hurting buyers—it’s making the housing shortage worse.
Lower Rates Would Unlock the Market
If the Fed cut rates even modestly, three key things would happen:
1. More Sellers Would List Their Homes – Even a small drop in mortgage rates would encourage some homeowners to finally sell, increasing supply.
2. Buyers Could Actually Afford Homes – Lower rates mean lower monthly payments, bringing more first-time buyers into the market.
3. Construction Would Pick Up – Developers rely on financing, and cheaper borrowing costs mean more new homes get built, easing the long-term shortage.
Instead, the Fed keeps preaching patience, acting like the economy is still overheating when the real pain is being felt by ordinary people who just want a place to live.
The Fed’s Inflation Obsession is Misguided
The Fed’s primary argument for keeping rates high is inflation. But here’s the problem: housing costs are a major driver of inflation. By keeping mortgage rates high, the Fed is directly contributing to the very problem it claims to be fighting.
- High rates discourage new construction → less supply → higher rents and home prices → higher inflation.
- Homeowners staying put → fewer existing homes for sale → higher prices due to scarcity → higher inflation.
It’s a self-defeating cycle. The Fed is so focused on "cooling demand" that it’s ignoring the supply crisis making housing unaffordable.
A Caveman Could Figure This Out
You don’t need a PhD in economics to see the problem. The logic is simple:
- Low rates = more buying and selling.
- High rates = frozen market, higher prices long-term.
Yet the Fed keeps rates high, pretending this is the only way to fight inflation while ignoring the collateral damage. Meanwhile, corporations and wealthy investors keep buying up homes in cash, pricing out regular families.
What Should Happen Next?
The Fed needs to cut rates now before the housing crisis gets worse. Every month they delay:
- More young families are priced out forever.
- More homeowners stay trapped in homes they’d otherwise sell.
- The shortage grows, making affordability even worse in the long run.
Powell’s stubbornness isn’t just bad policy—it’s economic malpractice. If he doesn’t act soon, the housing market will remain broken, and an entire generation will be locked out of homeownership.
Bottom Line: The Fed Chair is a jerk for not seeing what’s obvious to everyone else. Lower the rates. Fix the housing market. It’s not that complicated.
#Powell #Trump #FederalReserve #FedChair #InterestRates