"He ordered Fannie Mae and Freddie Mac to use their balance sheets to buy $200 billion worth of mortgage bonds, aimed at putting downward pressure on mortgage rates that could entice new homebuyers. That news rippled through bond markets last week and lowered rates. Trump also said that credit card rates should be capped at 10% for one year, beginning next week - though it's unclear whether banks would honor that demand without legislation or regulations that force them to."
"In effect, Trump is attempting to go around the Fed to unilaterally make it cheaper for Americans to get a mortgage and spend on a credit card - perhaps undercutting the central bank in the midst of a historic pressure campaign to get rock-bottom rates. He is trying to do so, however, without either the work of pushing legislation through Congress or the onerous legal process of writing regulations."
Trump ordered Fannie Mae and Freddie Mac to use their balance sheets to buy $200 billion of mortgage bonds to push mortgage rates lower and entice new homebuyers. He also called for capping credit card rates at 10% for one year, though banks may not comply without legislation or regulations. The mortgage bond announcement briefly lowered mortgage rates to under 6%, the lowest since 2023, but the drop may be limited. Economists and bankers warn that rate caps could hurt consumer credit availability, reduce consumer spending, and ultimately slow the economy. Lower mortgage rates can also fuel housing demand and keep home prices elevated.
Read at Axios
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