Trump Administration Considers National Housing Emergency Amid Market Stress

President Trump has intensified his pressure on Federal Reserve Chairman Jerome Powell by attempting to fire Federal Reserve governor Lisa Cook, aiming to influence the Fed to cut benchmark interest rates to alleviate the housing market crisis. However, experts warn that such political interference could undermine the Fed's independence and potentially lead to higher mortgage rates due to loss of investor confidence. The Trump administration is also considering declaring a national housing emergency to address high borrowing costs, but Nobel laureate economist Paul Krugman criticizes Trump's broader policies, including tariffs, for worsening the housing shortage and affordability crisis. Mortgage rates, while slightly below summer peaks, remain historically high, causing increased buyer withdrawals from purchase agreements amid rising inventory and economic uncertainty. The housing market dynamics now hinge on Federal Reserve policy decisions, consumer confidence, and sellers adjusting prices to current market conditions, with experts emphasizing the need to build more housing to resolve the ongoing crisis.