Trump Promotes Low Inflation and Low Mortgage Rates

Summary

U.S. President Trump is publicly promoting his administration’s achievements of low inflation and low mortgage ratesWallstreetcn. He claims mortgage rates are at a four-year low, which will help the housing crisis, and that core inflation fell to 1.7% in Q4 2025. However, some reports suggest these figures are exaggerated and that many Americans still face high living costs. A key part of his strategy may involve bypassing the Federal Reserve by having government-sponsored enterprises like Fannie Mae and Freddie Mac purchase mortgage-backed securities directly.

Impact Analysis

So he’s building the ‘economic boom’ narrative, but the real signal here isn’t the numbers themselves—which are debatable and likely exaggerated. The key is the mechanism he’s floating: using Fannie and Freddie to buy MBS directly to force down mortgage rates. This is a direct end-run around the Fed. He wants to take credit for low rates while pressuring the system for more, regardless of the Fed’s stance. It’s a move towards fiscal dominance. Short-term, this narrative could give a sentimental boost to homebuilders and real estate. But the bigger picture is the institutional risk. If the market starts believing he can successfully subordinate the Fed, it’s a long-term negative for the dollar and could lead to higher risk premia on US assets. I’d be wary of getting too bullish on this ‘good news’ and instead watch for increased volatility.