What Trump’s Rift With Fed Chair Powell Could Mean for Housing
What Trump’s Rift With Fed Chair Powell Could Mean for Housing
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July 18, 2025 | New York City
Amid rising political tensions, President Trump has reportedly considered firing Federal Reserve Chair Jerome Powell, a move that could send shockwaves through financial markets—especially the housing sector. Trump has publicly clashed with Powell over interest rate policy, pushing for aggressive rate cuts that Powell argues could worsen inflation.
Real estate and mortgage experts warn that removing the Fed chair would erode investor confidence in U.S. monetary policy. This could lead to bond sell-offs, rising long-term interest rates, and even tighter conditions for borrowers. Experts estimate that a 1% rise in mortgage rates could disqualify over 4 million households from affording a $400,000 home—making the dream of homeownership increasingly elusive.
The prospect of higher borrowing costs could also freeze the market, discouraging existing homeowners from trading up and locking first-time buyers out altogether. Analysts point to past examples—like Turkey in 2021—where political interference in central banking led to runaway inflation and long-term economic damage.
While potential successors like Treasury Secretary Scott Bessent and former adviser Kevin Hassett have been floated, industry professionals argue the real issue is maintaining the Fed’s independence. Replacing Powell with a politically motivated figure could spark economic volatility, further complicating an already fragile housing recovery.
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