This morning, I saw a video of a Realtor in Dallas telling people that President Trump is going to fire Fed Chairman Jerome Powell and replace him with someone who will cut interest rates immediately. She indicated that buyers should buy before that happens and sellers should hold off on selling.
I’m not trying to get political, and nobody is a cheerleader for lower interest rates more than me. For the last 3 years, I’ve been pretty clear that I don’t know what is going to happen with rates. Over that time, a lot of people have been angry with me because I don’t give them an overly optimistic predictions.
In fact, back in January, 2024 someone came to one of my home selling seminars and told everyone to hold off on selling because rates would be 5% by June. When I shrugged my shoulders and said I wasn’t so sure that would happen he got very angry.
I haven’t seen any economists agree with the take from the Dallas Realtor. Let’s talk about a few things we do know…
- It’s not likely President Trump will fire Powell. Most say he doesn’t have the authority to do that even if he wanted to.
- The Fed makes decisions as a committee. The Chairman can influence the Board of Governors, but doesn’t have the power to override their votes. Unless all the voting members who aren’t in favor of reducing rates were fired it wouldn’t matter how the Chairman votes.
- Mortgage rates are more closely tied to the 10 Year Treasury Bond than the Fed rate. The 10 Year is driven by market data and not something that can be manipulated by a Fed vote.
- If Powell was fired it would cause chaos in the stock market and the bond market. Many economists predict if he was fired the stock market would crash and we would actually see higher mortgage rates.
Personally and professionally, I’d love to see lower mortgage rates, but I am not making any plans with my life on wishful thinking, and neither should you.
If you plan to sell your home, now is the best time to attend our Free Home Selling Seminars. If you want to attend a seminar, contact us, and we will notify you when they are scheduled. As always, you can check KopaSeminar.com to see the dates and times of our in-person and online Free Home Selling Seminars. For years, home sellers have told me they benefited from attending our events. Sign up at KopaSeminar.com.
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