Latest news with #Pulte
Miami Herald
6 hours ago
- Business
- Miami Herald
Fannie Mae chief Pulte sends savage one-word message to Fed's Powell
There's mounting tension in Washington, D.C. over the Federal Reserve's interest rate policy. After cutting interest rates by 1% late last year, Fed Chairman Jerome Powell has taken a decidedly different tack in 2025, holding interest rates steady, and frustrating many, including President Donald Trump, who wants rate cuts now. President Trump has called Powell a "numbskull" for not reducing the Fed Funds Rate, and "Mr. Too-Late" because of the risk that the Fed's hesitancy will put it behind the curve, possibly causing stagflation or worse, a recession. Don't miss the move: Subscribe to TheStreet's free daily newsletter The Fed's dilly-dallying on rate cuts means homebuyers will have to wait for lower mortgage rates, a fact that hasn't been lost on housing market experts, including Fannie Mae Chairman Bill Pulte, who is also director of the Federal Housing Finance Agency (FHFA). Pulte knows a thing or two about the housing market, given he's the grandson of the founder of the mega homebuilder PulteGroup and formerly served on PulteGroup's board of directors. This week, Pulte targeted the Fed's monetary policy, delivering a harsh rebuke and curt message to Chairman Powell that has raised eyebrows. Image source: Bartkowski/Getty Images The Federal Reserve has an important mission to encourage low inflation and unemployment by raising or lowering the Fed Funds Rate. The FFR is the rate that banks charge each other when lending excess reserve balances overnight. Unfortunately, its dual mandate is easier said than done. Often, low inflation and unemployment are contrary goals. Higher rates lower inflation but increase job losses, while lower rates decrease unemployment but increase inflation. Related: Fed interest rate cut decision resets forecasts for the rest of this year We've witnessed that dynamic in real time over the past five years. At risk of surging unemployment due to the Covid pandemic, the Fed doubled down on its zero-interest rate policy of low rates. The move worked, helping the U.S. avoid a recession or worse. However, low rates (and stimulus payments) caused inflation to spike in 2021. At the time, Fed Chair Powell initially and infamously referred to inflation as 'transitory;' however, he was forced to switch gears and embark on the most aggressive rate hikes since the 1980s after inflation skyrocketed to 8% in June 2022. The higher rates have sent inflation below 3%; however, they've done so at a cost, given emerging cracks in the jobs market. The U.S. unemployment rate has moved up to 4.2% from 3.4% in 2023, and over 696,000 layoffs have been announced this year through May, up 80% year over year, according to Challenger, Gray, & Christmas. There's also increased evidence that the economy is weakening. ISM's latest manufacturing and services PMIs, which measure economic activity, were below 50, suggesting contraction in May. A concerning job market and potential economic slowing aren't great recipes for consumer and business spending, yet the Fed has kept its finger off the rate cut trigger, citing inflation uncertainty amid recently enacted tariffs. Related: Major housing expert predicts huge change to mortgage rates in 2026 Since February, President Trump has placed 25% tariffs on Canada, Mexico, and autos, a 10% baseline tariff on all imports, and stiff tariffs on China, a significant trade partner that supplies just about everything from clothing to car parts. While China's tariffs have retreated from a sky-high 145% in April that effectively shut down trade, they remain at 30%. Worries that tariffs may cause inflation to reassert itself in the coming months have Fed Chair Powell a bit boxed in, given that rate cuts to shore up the economy may add to possible inflationary fires this year. Fed Chair Powell argues that a wait-and-see approach makes sense, given that unemployment is historically low and the economy, while showing some worrisome signs, is still expected to grow by 3% this quarter. Related: Forget tariffs, Fed interest rate cuts may hinge on another problem "The effects on inflation could be short-lived - reflecting a one-time shift in the price level. It is also possible that the inflationary effects could instead be more persistent," said Powell after holding rates steady on June 18. "Avoiding that outcome will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices, and, ultimately, on keeping longer-term inflation expectations well anchored." The worry over tariffs isn't shared by Fannie Mae Chairman Pulte. After Powell held interest rates at their current 4.25% to 4.50% range, he blasted Powell, calling for immediate interest rate cuts to lower mortgage rates and support the housing market. "Jerome Powell is a main reason for the Housing Supply Crisis in this Country," wrote Pulte on X. "By improperly keeping interest rates high, Jerome Powell is trapping homeowners in low-rate mortgages and choking off existing home sales - directly fueling the housing supply crisis. He must lower rates." Pulte is, at a minimum, correct anecdotally that the housing market is in a crisis, especially with first-time homebuyers who struggle to come up with enough money for a down payment, given supply shortages have propped up home prices, and can't afford monthly mortgage payments. More Economic Analysis: Federal Reserve prepares strong message on long-term interest ratesMassive city workers union approves strikeAnalyst makes bold call on stocks, bonds, and gold Mortgage rates typically run 2% to 3% higher than the 10-year Treasury note yield, and the Fed Funds Rate highly influences the 10-year yield. As a result, 30-year mortgage rates have risen to roughly 6.8% from 2.7% in early 2021 before Powell raised rates to fight inflation. In April, the median price for a new home exceeded $407,000, up from $310,000 five years ago. Meanwhile, according to Bankrate, the average mortgage payment doubled to $2,207 in 2024. With housing affordability so challenging and the Fed firmly in the "no cut" camp, Pulte sent a powerful message to Powell. "Americans are sick and tired of Jerome Powell. Let's move on!" wrote Pulte. "Funny thing is Jay Powell is talking right now about the housing market - he has no clue what he can do for the housing market. And he's not listening to the people who help lead the housing market." His blunt advice to Powell? "RESIGN," said Pulte. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
a day ago
- Business
- Yahoo
Trump's housing director rips the Fed, says the slow pace of rate cuts is fueling America's home-inventory problem
The Fed kept interest rates unchanged again this week, sparking criticism from the Trump administration. The head of the FHFA argues that high rates have worsened the housing crisis. High rates have created a "lock-in" effect that's limited inventory of homes for sale, experts say. Federal Reserve Chairman Jerome Powell's decision to keep rates unchanged earlier this week on Wednesday was widely expected by the market, but it was bashed by the president and his administration. In addition to Donald Trump, the critics of the latest Fed decision include Bill Pulte, the director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac. Many naysayers argue inflation has come down enough for the Fed to cut rates, but Pulte takes another issue: he believes sustained high rates are kneecapping America's housing market and exacerbating the affordability crisis. On Wednesday, prior to the Fed meeting, Pulte posted on X that Powell needed to "lower interest rates today," or immediately resign, arguing that Fannie Mae and Freddie Mac could help more Americans afford a house if rates came down. After the decision to hold rates steady, Pulte shared a series of posts on X further bashing Powell, calling him "a main reason for the Housing Supply Crisis in this country" and criticizing him for hurting the mortgage market. As he's done in the past, President Donald Trump also ripped into the Fed's decision on Truth Social, referencing Pulte's statements and calling for Powell to lower rates to 2.5%. The president has repeatedly clashed with Powell, blaming him for holding the stock market back, and even threatening to fire him. Powell's reasoning behind staying in wait-and-see mode is that the Fed is monitoring the impacts of tariffs on inflation and wants to see more evidence that inflation has cooled for good. Pulte's argument is referring to the "lock-in" effect in the housing market, which some housing experts argue has exacerbated supply issues by keeping current owners from selling their homes to avoid having to refinance a new purchase as a higher rate than their existing mortgage. The 30-year mortgage rate rose from historically low levels under 3% during the pandemic to around 7% today. Some housing experts may agree with Pulte's assessment that high rates are hurting the market. Lawrence Yun, chief economist at the National Association of Realtors, sees mortgage rates as the "magic bullet" that'll alleviate the housing crisis. "Part of the delay in recovery is because the Federal Reserve has changed its outlook and appears to be on pause for a longer period," Yun said during a NAR economic forum earlier this month. Others are optimistic that the housing market will improve this year. The Fed is still on track for two cuts in 2025, and Nadia Evangelou, senior economist at NAR, sees a path for mortgage rates to decline to 6.4% to 6.5% by year-end. In some markets across the country, buyers are gaining the upper hand as home price appreciation slows and increases affordability. "We are at a bit of a turning point with mortgage rates," Evangelou told Business Insider. "We expect affordability to be better and for rates to ease, but we don't know to what extent. When mortgage rates are at 6.7% or lower, we typically see more activity." Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Trump's housing director rips the Fed, says the slow pace of rate cuts is fueling America's home-inventory problem
The Fed kept interest rates unchanged again this week, sparking criticism from the Trump administration. The head of the FHFA argues that high rates have worsened the housing crisis. High rates have created a "lock-in" effect that's limited inventory of homes for sale, experts say. Federal Reserve Chairman Jerome Powell's decision to keep rates unchanged earlier this week on Wednesday was widely expected by the market, but it was bashed by the president and his administration. In addition to Donald Trump, the critics of the latest Fed decision include Bill Pulte, the director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac. Many naysayers argue inflation has come down enough for the Fed to cut rates, but Pulte takes another issue: he believes sustained high rates are kneecapping America's housing market and exacerbating the affordability crisis. On Wednesday, prior to the Fed meeting, Pulte posted on X that Powell needed to "lower interest rates today," or immediately resign, arguing that Fannie Mae and Freddie Mac could help more Americans afford a house if rates came down. After the decision to hold rates steady, Pulte shared a series of posts on X further bashing Powell, calling him "a main reason for the Housing Supply Crisis in this country" and criticizing him for hurting the mortgage market. As he's done in the past, President Donald Trump also ripped into the Fed's decision on Truth Social, referencing Pulte's statements and calling for Powell to lower rates to 2.5%. The president has repeatedly clashed with Powell, blaming him for holding the stock market back, and even threatening to fire him. Powell's reasoning behind staying in wait-and-see mode is that the Fed is monitoring the impacts of tariffs on inflation and wants to see more evidence that inflation has cooled for good. Pulte's argument is referring to the "lock-in" effect in the housing market, which some housing experts argue has exacerbated supply issues by keeping current owners from selling their homes to avoid having to refinance a new purchase as a higher rate than their existing mortgage. The 30-year mortgage rate rose from historically low levels under 3% during the pandemic to around 7% today. Some housing experts may agree with Pulte's assessment that high rates are hurting the market. Lawrence Yun, chief economist at the National Association of Realtors, sees mortgage rates as the "magic bullet" that'll alleviate the housing crisis. "Part of the delay in recovery is because the Federal Reserve has changed its outlook and appears to be on pause for a longer period," Yun said during a NAR economic forum earlier this month. Others are optimistic that the housing market will improve this year. The Fed is still on track for two cuts in 2025, and Nadia Evangelou, senior economist at NAR, sees a path for mortgage rates to decline to 6.4% to 6.5% by year-end. In some markets across the country, buyers are gaining the upper hand as home price appreciation slows and increases affordability. "We are at a bit of a turning point with mortgage rates," Evangelou told Business Insider. "We expect affordability to be better and for rates to ease, but we don't know to what extent. When mortgage rates are at 6.7% or lower, we typically see more activity." Read the original article on Business Insider Sign in to access your portfolio
Business Insider
a day ago
- Business
- Business Insider
Trump's housing director rips the Fed, says the slow pace of rate cuts is fueling America's home-inventory problem
Federal Reserve Chairman Jerome Powell's decision to keep rates unchanged earlier this week on Wednesday was widely expected by the market, but it was bashed by the president and his administration. In addition to Donald Trump, the critics of the latest Fed decision include Bill Pulte, the director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac. Many naysayers argue inflation has come down enough for the Fed to cut rates, but Pulte takes another issue: he believes sustained high rates are kneecapping America's housing market and exacerbating the affordability crisis. On Wednesday, prior to the Fed meeting, Pulte posted on X that Powell needed to "lower interest rates today," or immediately resign, arguing that Fannie Mae and Freddie Mac could help more Americans afford a house if rates came down. Because President Trump has crushed inflation, Fed Chairman Jerome Powell needs to lower interest rates today, and if not Chairman Powell needs to resign, immediately. Fannie Mae and Freddie Mac can help so many more Americans if Chair Powell will just do his job and lower rates. — Pulte (@pulte) June 18, 2025 After the decision to hold rates steady, Pulte shared a series of posts on X further bashing Powell, calling him "a main reason for the Housing Supply Crisis in this country" and criticizing him for hurting the mortgage market. Jerome Powell is a main reason for the Housing Supply Crisis in this Country. By improperly keeping interest rates high, Jerome Powell is trapping homeowners in low-rate mortgages and choking off existing home sales—directly fueling the housing supply crisis. He must lower rates. — Pulte (@pulte) June 20, 2025 As he's done in the past, President Donald Trump also ripped into the Fed's decision on Truth Social, referencing Pulte's statements and calling for Powell to lower rates to 2.5%. The president has repeatedly clashed with Powell, blaming him for holding the stock market back, and even threatening to fire him. Powell's reasoning behind staying in wait-and-see mode is that the Fed is monitoring the impacts of tariffs on inflation and wants to see more evidence that inflation has cooled for good. Pulte's argument is referring to the "lock-in" effect in the housing market, which some housing experts argue has exacerbated supply issues by keeping current owners from selling their homes to avoid having to refinance a new purchase as a higher rate than their existing mortgage. The 30-year mortgage rate rose from historically low levels under 3% during the pandemic to around 7% today. Some housing experts may agree with Pulte's assessment that high rates are hurting the market. Lawrence Yun, chief economist at the National Association of Realtors, sees mortgage rates as the "magic bullet" that'll alleviate the housing crisis. "Part of the delay in recovery is because the Federal Reserve has changed its outlook and appears to be on pause for a longer period," Yun said during a NAR economic forum earlier this month. Others are optimistic that the housing market will improve this year. The Fed is still on track for two cuts in 2025, and Nadia Evangelou, senior economist at NAR, sees a path for mortgage rates to decline to 6.4% to 6.5% by year-end. In some markets across the country, buyers are gaining the upper hand as home price appreciation slows and increases affordability. "We are at a bit of a turning point with mortgage rates," Evangelou told Business Insider. "We expect affordability to be better and for rates to ease, but we don't know to what extent. When mortgage rates are at 6.7% or lower, we typically see more activity."
Yahoo
06-06-2025
- Business
- Yahoo
Democrats call for halt of Fannie Mae, Freddie Mac privatization
Senate Democrats led by Sen. Elizabeth Warren (Mass.), the ranking member of the Banking Committee, called on the Trump administration to halt the reprivatization of Fannie Mae and Freddie Mac, which finance 70 percent of the nation's mortgage market and entered federal conservatorship after the 2008 financial crisis. 'We have serious concerns that you plan to make significant changes to the enterprises in a way that would put investor profits over the homes of millions of Americans. Should President Trump make good on his plans, he may take us back to the status quo before the 2008 foreclosure crisis,' Warren and other Democratic senators wrote in a letter to William Pulte, the director of the Federal Housing Financing Administration (FHFA). Senate Democratic Leader Chuck Schumer (N.Y.) and Democrats on the Senate Banking Committee also signed the letter. They asked Pulte and his staff to 'halt any plans to reprivatize the enterprises until you have adequately assessed the potential impact of y our plans on the housing market.' They warned that neither the federal housing administration nor the administration have produced a study of what impact releasing Fannie and Freddie from government conservatorship would have on mortgage rates and the housing market more broadly. The Democratic pushback was prompted by President Trump's post on social media last month that he is working on 'TAKING THESE AMAZING COMPANIES PUBLIC,' referring to the two special purpose entities. Democrats said they want Pulte to explain what factors influenced Trump's social media posts and what has changed since the FHFA director told lawmakers recently that the privatization of Fannie and Freddie was not a top priority. Warren and her colleagues asked Pulte to provide a list of any meetings he's had about privatization since his Senate confirmation in March and to name the agencies, departments and White House officials that have been involved in discussions about privatization. 'Despite your statutory role as regulator and conservator of the enterprises, you recently stated that President Trump will 'eventually make whatever decision that he wants to make, on his own timeline.' It is incredibly concerning that you appear to be conceding your responsibility to ensure the safety and soundness of the enterprises to advance the president's political agenda,' they wrote. They asked Pulte to provide answers to their questions by June 18. The other Democratic signatories included Sens. Catherine Cortez Masto (Nev.), Tina Smith (Minn.), Ruben Gallego (Ariz.), Ron Wyden (Ore.), Andy Kim (N.J.), Mazie Hirono (Hawaii), Chris Van Hollen (Md.), Gary Peters (Mich.), Lisa Blunt Rochester (Del.) and Mark Warner (Va.). Sen. Bernie Sanders (I-Vt.) also signed the letter. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
