What Trump’s Fed chair pick, Kevin Warsh, could mean for mortgage rates

Group 1 - The housing affordability crisis is becoming a significant political issue, with Kevin Warsh suggesting that the Federal Reserve can utilize its monetary policy to lower mortgage rates [1][2] - Warsh believes that lowering interest rates can make 30-year fixed-rate mortgages more affordable, thereby revitalizing the housing market [2] - Trump's support for Warsh is based on the expectation that he will be more proactive in cutting interest rates compared to outgoing Chairman Jerome Powell [2][4] Group 2 - The Federal Reserve does not directly control mortgage rates, but its interest rate decisions can influence them, particularly through their relationship with the 10-year Treasury yield [3] - There are concerns that an explicit focus on cutting the federal funds rate to lower long-term rates could backfire, as noted by Realtor.com senior economist Jake Krimmel [4] - Bill Banfield from Rocket suggests that a policy of gradually reducing the Fed's balance sheet while lowering short-term rates could stabilize or slightly lower mortgage rates [6] Group 3 - Housing affordability is a complex issue that involves both supply and demand factors, with Powell indicating that it is primarily a supply issue, which is beyond the Fed's control [7] - Trump has expressed reluctance to support policies that might decrease home prices, positioning mortgage rates as a key tool in addressing affordability [8]