Trump's Housing Gambit: A Political Optics Game?

President Trump's plan to boost housing affordability by directing federal housing agencies to buy mortgage bonds might not significantly lower mortgage rates. Despite efforts, long-term Treasury yields remain high, complicating the administration's goals ahead of midterm elections. Skepticism remains about the plan's real impact.

President Donald Trump's recent initiative to improve housing affordability by encouraging federal agencies to purchase mortgage bonds has been met with skepticism from financial experts. The plan, unveiled last week, aims to use $200 billion to lower mortgage rates, yet analysts doubt its efficacy.

With the midterm elections approaching and a low approval rating of 33% in December regarding economic handling, Trump is under pressure to make tangible changes. However, Federal Housing Finance Agency Director Bill Pulte acknowledged the limitations of this strategy and suggested that more comprehensive measures are needed.

Critics argue that despite resembling past Federal Reserve quantitative easing efforts, the administration's actions may not achieve their intended impact. Many experts believe that lower Treasury yields and further volumetric adjustments in bond strategies are required to spur significant improvement in the housing market.

(With inputs from agencies.)