The Julia La Roche Show #288 Chris Whalen: Fed Caused Housing Emergency, Rate Cuts Won't Fix It
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Sep 20, 2025 Chris Whalen, Chairman of Whalen Global Advisors and author of The Institutional Risk Analyst blog, dives into macroeconomic insights and housing-market analysis. He highlights the Fed's role in escalating housing prices and discusses the looming housing emergency. Whalen explores homeowner psychology amidst fluctuating mortgage rates and offers a critical outlook on bank balance sheets with underwater mortgage securities. He also touches on the potential impacts of a weaker dollar and shares his high-conviction trades in gold and silver.
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Fed Cut Was Risk Management, Not Bold Shift
- The Fed cut 25bps because most governors preferred a smaller move, not a coordinated half-point cut.
- Housing affordability constrains how aggressively the Fed can lower rates without reigniting home-price inflation.
Mortgage Market Dynamics Drive Local Prices
- Mortgage coupon moves and lender behavior drove short-term rate dynamics more than macro signals in summer.
- Overbuilding in Sun Belt markets has already softened prices independent of Fed moves.
Wait 2–3 Years Before Buying Aggressively
- Homeowners should expect a correction and avoid assuming perpetual gains.
- If buying, consider waiting two to three years for a better entry as supply clears and rates normalize.
