Federal Housing Finance Agency (FHFA) Director Bill Pulte has once again criticized Fed Chair Jerome Powell after the Fed decided to leave interest rates unchanged.
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“Jerome Powell, again, lies to the American people,” Pulte said in an X post on Wednesday. “This time saying that the Fed has nothing to do with Housing. The Fed has EVERYTHING to do with Housing.”
Does the Federal Funds Rate Affect the Housing Market?
Pulte’s claim that the Fed affects the housing market is likely rooted in the relationship between the federal funds rate (FFR) and the 30-year fixed-rate mortgage (FRM). The two rates don’t have a direct relationship, although the FFR can still influence the 30-year FRM indirectly.
The 30-year FRM is closely tied to longer-term Treasury yields, like the 10-year yield. A higher FFR can result in a higher 10-year yield and vice versa, although the relationship isn’t 1:1. The 30-year FRM and 10-year yield are also affected by inflation expectations, economic growth expectations, and risk premiums.
Track the FFR and the 10-year Treasury yield with TipRanks’ Economic Indicators Dashboard.
