President Trump went on Truth Social (DJT) on Tuesday to accuse Jerome Powell of making it impossible for Americans to buy homes. He called him “Too Late Powell” and said, “People can’t get a mortgage because of him.” Trump argued that inflation is not a problem anymore and insisted that “every sign is pointing to a major rate cut.”
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His comments highlight how central the housing issue has become in the political fight over interest rates. With prices high and mortgages near 6.7%, Trump says Powell’s caution is choking the housing market.
Fed Holds Rates despite Political Pressure
The Federal Reserve has kept its main interest rate between 4.25% and 4.50% all year. Policymakers have worried that Trump’s tariffs could spark another round of inflation and have pointed to a still-strong labor market as a reason not to cut too quickly.
Inflation has cooled from its pandemic highs but remains above the Fed’s 2% target. Consumer prices rose 2.7% year-on-year in July, while core inflation stayed above 3%. For Powell, that is enough to justify keeping rates higher for longer, even if it frustrates the White House.
Markets Brace for Powell’s Jackson Hole Speech
Markets now expect the Fed to cut rates by a quarter point at its September meeting. Some in Trump’s circle, including Treasury Secretary Scott Bessent, have pushed for a half-point cut. Trump himself has called for even deeper cuts, far beyond what Wall Street is betting on.
Powell will have the chance to set the tone on Friday when he speaks at the Fed’s annual Jackson Hole symposium. Investors will listen carefully for any signal on how quickly the central bank is willing to act.
Housing Pain Shows the Bigger Problem
Mortgage rates remain high despite earlier rate cuts, because long-term borrowing costs are tied more closely to the bond market and inflation expectations than to the Fed’s short-term moves. Even if Powell cuts rates in September, homebuyers may not feel much relief if investors still worry about inflation and America’s massive debt load.
For Trump, however, the housing struggle makes Powell an easy target. The thing is, affordability is currently at record lows, so Trump’s motive makes sense. He is pressing the Fed harder than ever to slash rates, whether Powell agrees or not.
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