Supporting Trump? Director of the Federal Housing Finance Agency of the US: It's Time for the US Fed to Cut Interest Rates!

William Pulte, Director of the Federal Housing Finance Agency (FHFA), called out to Fed Chairman Powell on social media: "It's time to resume interest rate cuts!"

"Really, enough is enough! Stop it already! Powell needs to lower interest rates. President Trump has crushed Biden's inflation, and there's no reason not to lower interest rates. If Chairman Powell does so, the real estate market will be in much better shape." He wrote.

Pulte's latest remarks echo the "long-held wish" of US President Trump since taking office. Since assuming office, Trump has been continuously pressuring Powell to cut interest rates promptly, especially against the backdrop of indiscriminate use of "tariff sticks."

However, can an interest rate cut really "cure all ills"? Many analysts' answer is no, and it is precisely because of Trump's economic policies that US home prices have been difficult to cool down.

Some experts have pointed out that the US housing inventory remains limited, and this issue is unlikely to ease this year. Moreover, due to tariffs driving up US material prices and immigration policies leading to labor shortages, US builders lack the motivation to construct.

Many companies and business groups have frequently warned that Trump's tariff policies will force them to raise prices. According to the US Fed's latest Beige Book, retailers generally expect to raise prices in the near future in response to tariffs.

In early April, Trump stated, "This would be the best time for Fed Chairman Jerome Powell to cut interest rates. He's always 'late,' but he can now quickly change his image. Lower interest rates, Jerome, and stop playing politics."

Since cutting interest rates by 100 basis points in the second half of last year, the US Fed has remained inactive, maintaining the target range for the federal funds rate at 4.25%-4.5%. As of the interest rate-setting meeting in May this year, it was the third consecutive meeting where the Fed kept interest rates unchanged.

At the press conference after the May interest rate meeting, Powell stated that the Fed does not need to rush to adjust interest rates, and the current policy is moderately restrictive. Trump's calls for interest rate cuts will not affect the Fed's work. He also pointed out that the White House's intermittent trade wars have created an environment of economic uncertainty.

Currently, high home prices are one of the most stubborn areas of US inflation. Daryl Fairweather, Chief Economist at Redfin, recently warned that Trump's policies on immigration, tariffs, etc., have kept US home prices high, which has increased the risk of rising US inflation and also led to greater resistance to interest rate cuts by the Fed.

Economists generally expect that inflation in the US will rise—at least in the short term—which could lead the US Fed to maintain high interest rates for a longer period.