BiggerPockets Real Estate Podcast
Can Trump Push Jerome Powell Out of the Fed? w/WSJ's Nick Timiraos
Nov 22, 2024
In this discussion, Nick Timiraos, a reporter at The Wall Street Journal and Federal Reserve expert, dives into the complex relationship between President Trump and Fed Chair Jerome Powell. They explore whether Trump could pressure Powell and the implications for Fed independence. Timiraos addresses the risks of high interest rates on the economy, discusses potential future rate cuts, and evaluates the political dynamics surrounding the Fed's role. Listeners gain insights on how these developments could shape the real estate landscape.
34:47
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Quick takeaways
- The independence of the Federal Reserve is vital for maintaining economic stability amid political influences and pressures to alter rate policies.
- The interaction between bond market dynamics and Fed rate cuts highlights the complexity of mortgage rate movements for real estate investors.
Deep dives
Impact of Federal Reserve Decisions on the Housing Market
The Federal Reserve significantly influences the economy and the housing market by indirectly affecting borrowing costs, even though it does not set mortgage rates directly. Recent reductions in the federal funds rate by 75 basis points this year have not led to a corresponding drop in mortgage rates, as these rates are more closely aligned with bond market dynamics. When the bond market perceives a lower risk of recession, bond yields rise, which in turn can increase mortgage rates. This complexity suggests that real estate investors must stay attuned to both Fed policies and bond market movements.
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