Powell is done. Will Warsh help with mortgage rates?

Jerome Powell’s tenure as Federal Reserve chair is coming to an end as the Department of Justice (DOJ) has Before I address this topic, I want to give you my take on rates.

Mortgage rates and bonds

Since 2015, whenever I do my mortgage rate forecasts, I never target rates first. I target where I believe the 10-year Treasury yield can range for a calendar year, and how

This is based on my slow dance theory, which I have promoted for years — that 65% to 75% of the range for the 10-year yield and mortgage rates is due to Fed policy and how it guides the market. I often reference this chart to prove my point on the relationship between the 10-year yield and mortgage rates.

The final piece of the puzzle is With that in mind, what about Warsh? Can he really cut rates?

No, he can’t cut rates by himself, but he will have a much different tone about rate cuts than All in all, not shocking news from the DOJ that they’re dropping the Fed probe. This is the only way to get the Senate to confirm Warsh, which is what Trump wants.

But we all need to be realistic on what can happen here, especially as the war persists and oil prices are elevated. Still, it should be better for the housing market if the Fed chair talks about housing needing help than to deflect these questions.