In the midst of one of the slowest spring real-estate markets in decades, the director of the Federal Housing Finance Agency strongly urged Federal Reserve Chair Jerome Powell to resume cutting the central bank’s interest rates.
Trump-appointee FHFA Director William J. Pulte made his blunt request on X just a few days before the minutes of the May Federal Open Meeting Committee, chaired by Powell, showed multiple reasons why the central bank chose not to reduce rates.
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Pulte and other Trump administration officials have been demanding that the independent Federal Reserve Bank’s leaders cut interest rates as early as its June or July meetings to allow, among other outcomes, mortgage rates to drop for consumers.
Who is William (Bill) Pulte?
Pulte was sworn in as the director of the U.S. Federal Housing Agency, FHFA, following his nomination by President Donald J. Trump and bipartisan confirmation by the U.S. Senate.
In this role, Pulte oversees Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.
Related: Fed official sends strong message about interest-rate cuts
He knows a thing or two about the housing market. Pulte is the grandson of the founder of PulteGroup, one of the largest U.S. homebuilders. He has had a longstanding career in homebuilding, housing products, and community development, including sitting on PulteGroup's board from 2016 to 2020.
In 2011, Pulte founded Pulte Capital Partners LLC, an investment firm that focuses on building and housing products.
He's also widely followed on the social media site, “X”, where he garnered over 3.2 million followers partly due to his focus on philanthropy.
Why lower interest rates matter to Americans
As inflation stays relatively steady and housing inventory dries up, Pulte turned to Elon Musk’s social media platform X to plead for a long-awaited change in the federal funds interest rate.
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The Federal Reserve impacts consumer interest rates by influencing the federal funds rate, which in turn affects the money supply.
When the federal funds rate is lowered, it can stimulate economic growth and lower interest rates for consumers.
Mortgage rates are impacted by changes in the 10-year Treasury note, which is influenced by changes in the Fed Funds Rate. Most U.S. mortgages, particularly the 30-year fixed rate, are influenced more directly by the movement of the 10-year Treasury yield.
The current Fed Funds Rate is between 4.25 and 4.50%. The average interest rate on a 30-year home mortgage is approximately 6.86%. The 10-year Treasury yield as of May 29 is 4.32%, an increase from early 2023.
Some analysts believe the 10-year Treasury yield could reach 5.5% by the end of the year if inflationary pressures and global trade policies are not addressed.
Pulte sends blunt message to Fed Chair Powell
“Jay Powell needs to lower interest rates — enough is enough,” he wrote. “President Trump has crushed Biden’s inflation, and there is no reason not to lower rates. The housing market would be in much better shape if Chairman Powell does this,” Pulte said in the X post on May 27.
Pulte says the rate cut is overdue and prolongs the multiple economic damages the Biden administration left behind. Pulte did not mention Trump’s seesawing tariffs.
Redfin recently announced that there were 500,000 more buyers for homes in the United States than inventory of houses for sale.
Related: Fed minutes send strong message on interest-rate cuts
