CNBC41 minutes agoPolitics2 min read

Vance Urges Fed Rate Cuts for Housing Affordability, Contradicting Trump-Appointed Official

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Vice President JD Vance urged the Federal Reserve to cut interest rates to improve home affordability, adding to pressure from President Trump on the central bank, despite recent hints from Trump-appointed Fed chair Kevin Warsh and Governor Michael Barr favoring rate hikes to combat inflation, while Governor Christopher Waller signaled preference for steady rates ahead of the September 15-16 FOMC meeting.

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Why It Matters

The Federal Reserve is under pressure from the Trump administration to lower interest rates to improve home affordability, despite its mandate to control inflation, with recent conflicting signals from Fed leadership about future rate moves.

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The Federal Reserve should cut interest rates to make homes more affordable, Vice President JD Vance said Thursday, adding to the pressure President Donald Trump has placed on the central bank to cut borrowing costs.

The remarks came days after Trump's handpicked Fed chair, Kevin Warsh, hinted at the possibility of doing the opposite: addressing persistently high inflation by hiking rates.

"Obviously the president cares a lot about interest rates," Vance said at a White House press briefing when asked by CNBC's Eamon Javers for the Trump administration's view on the volatile U.S. bond market.

"One of the main reasons he cares a lot about interest rates is because he wants Americans to be able to afford a home," Vance said, referencing Trump. "When interest rates go higher, that means that borrowing costs are higher."

"We believe that the Fed should be lowering interest rates," he said, calling it the "proper and responsible" response to recent U.S. inflation data.

Vance added, "We're doing a lot of things to try to keep those interest rates down, but it would be nice to have some help from the Federal Reserve."

Vance's remarks may add to concerns about the erosion of the Fed's independence under Trump, who aggressively pushed Warsh's predecessor to slash rates and is trying to fire Governor Lisa Cook.

Less than a week earlier, Warsh said he is committed to bringing the inflation rate back down to the Fed's 2% target, and sees interest rates as the key tool to rein it in.

"Short-term interest rates are the predominant tool to achieve the dual mandate," he said at a speech in Jackson Hole, Wyoming.

Vance's remarks came less than two weeks before the Federal Open Market Committee is set to convene and decide whether or not to adjust rates.

The outcome of that meeting is far from certain: Traders are about evenly split on the odds of a rate hike at the Sept. 15-16 meeting, according to CME Group's FedWatch gauge.

On Tuesday, Fed Governor Michael Barr said he would be prepared to back a rate increase if inflation stays elevated.

But on Thursday morning, Governor Christopher Waller said he is more likely to keep rates steady.

What to Watch

AI outlook — possibilities, not facts

The Federal Reserve will hold interest rates steady at the September 15-16 meeting
Possible · Within weeks
Political pressure on the Federal Reserve to cut rates will continue regardless of the September decision
Likely · Within months

Open Questions

Will the Federal Reserve cut, hold, or raise interest rates at the September 15-16 meeting?
How will the Fed respond to sustained political pressure from the White House?
What impact will the eventual rate decision have on inflation and housing markets?

Vance Urges Fed Rate Cuts for Housing Affordability, Contradicting Trump-Appointed Official

interest rates federal reserve jd vance