Opendoor(US:OPEN) Benzinga·2026-01-09 04:42Core Viewpoint - President Trump's proposal to purchase $200 billion in mortgage-backed securities is facing significant criticism from economists, who warn that while it may temporarily lower mortgage rates, it could worsen housing affordability in the long run [1]. Group 1: Economic Concerns - Economist Mohamed El-Erian highlights that the proposal revives concerns about political interference in monetary policy, particularly regarding the Federal Reserve's asset purchases, which he refers to as "People's QE" [2][3]. - El-Erian also notes that public anxiety over affordability will likely lead to more aggressive policy responses, indicating a shift in market dynamics [4]. Group 2: Long-term Implications - Economist Peter Schiff criticizes the plan, stating that using $200 billion to buy mortgage bonds reduces the funds available for Treasury purchases, potentially leading to increased Treasury yields and inflation in the long term [5]. - Schiff argues that the fundamental issue in the housing market is not high mortgage rates but rather high home prices, suggesting that the proposed policy could exacerbate the crisis by allowing buyers to overpay for homes [6]. Group 3: Unusual Intervention - Nick Timiraos from The Wall Street Journal points out the unusual nature of this intervention, noting that it occurs during a period of solid economic activity without systemic risks, indicating a political motivation behind the move [7][8]. - Timiraos emphasizes that previous Federal Reserve purchases of mortgage-backed securities were made without profit motives and often resulted in significant losses, contrasting this with the current proposal [8]. Group 4: Market Reactions - Following Trump's announcement, prominent real estate stocks, including the Vanguard Real Estate Index Fund ETF and Opendoor Technologies Inc., experienced a rally, indicating a positive market reaction despite the underlying economic concerns [8].