Last week, Bill Pulte, Trump's appointee to the Federal Housing and Finance Administration—and the head of Fannie and Freddie—complained that Powell and the FOMC weren't forcing down interest rates enough.

Pulte wrote on X/Twitter:

"Because President Trump has crushed inflation, Fed Chairman Jerome Powell needs to lower interest rates today, and if not Chairman Powell needs to resign, immediately. Fannie Mae and Freddie Mac can help so many more Americans if Chair Powell will just do his job and lower rates."

With these comments, Pulte is demonstrating that he, like his boss Donald Trump, subscribes to the standard Yellen-Bernanke inflationist model of monetary policy: the job of the central bank is to forever force down interest rates, churn out more easy money, and devalue the currency.

Pulte claims publicly that this somehow makes homes more affordable. As we'll see below, though, the Fed's easy-money policy of recent decades has not made home more affordable. Rather, Fed policy has helped to relentless increase home prices through the Fed's asset purchases, interest rate policy, and monetary inflation.

Although Pulte is engaging in performative protests against "too-high" interest rates, it is more likely he is being motivated by the usual crony "capitalist" agenda: press for more monetary inflation so Wall Street will enjoy the fruits of more asset-price inflation.  

Of course, that's just speculation. But, his actual motivations are immaterial to the fact that following the recommendation of Trump, Vance, Pulte, et al, will only continue to blow up a housing bubble and place housing ever more beyond the reach of ordinary people.

Do Falling Interest Rates Increase Home Prices?

There is a fairly clear inverse relationship between interest rates and home prices. This is certainly obvious to real estate agents and their lobbyists who perennially lobby for lower interest rates because they know that lower interest rates lead to more home purchases and higher prices. This in turn, leads to higher commissions for agents.