Fed Cuts, Mortgage Hikes: Why Washington Can’t Wish Rates Down

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Washington keeps insisting that rate cuts will make housing affordable—but reality says otherwise. Despite the Fed lowering rates yet again, mortgage rates climbed, applications dropped nearly 4%, and the average 30-year fixed hit 6.38%. In this episode, Chris breaks down why the Fed doesn’t actually control mortgage rates, how $38+ trillion in debt and reckless fiscal policy are keeping borrowing costs high, and why empty political pressure won’t fix the problem. Until Congress gets serious about budgets, debt, and fiscal discipline, expect higher rates—and more broken promises on affordability.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
All Right, kiddos, a little mortgage rate reality in a
file list under the don't doubt me this third time? Right,
third time, I don't even know the Fed has lowered
rates and the powers that be in d C clamoring ah,
Jay Powell's gotta get rates down, gotta make homes more affordable. Yeah,

(00:40):
mortgage rates went up. Mortgage rates went up. Total mortgage
application volume fell by three point eight percent. What we
got the average interest rate thirty year fixed mortgage a
six point three eight Okay, why again, First and foremost,

(01:07):
the Fed doesn't control mortgage rates. It doesn't control the
rate on the tenure. Can most certainly mess around with
it if it starts playing quantitative easing and printing money.
There's no doubt about that. However, However, the reality of
the situation. Our fiscal policy here in the scover thirty

(01:31):
eight trillion dollars in debt based upon the various different
economic numbers that have come down the pike. You would
think that rates would start coming down, rates start coming
down because the Fed's going to have to lower rates
to a greater degree. We don't have that type of
credit anymore. We don't. I don't care what they're telling

(01:55):
you about tariff revenue, whatever it may be. Thirty eight
plus trillion dollars that we are still going backwards and
until that changes, expect more of the same. The quickest way,
the quickest way to get mortgage rates down is to

(02:16):
actually do something about it. I've talked about having a
balanced budget amendment the The current governor of Florida, Ron
De Santis, is going around and trying to get states
to sign onto this to make it a part of
the constitution, a constitutional amendment to have a balanced budget,
just to show that you're prudent and have to follow through.

(02:36):
I mean, again, we could do that, but let's face reality,
we don't even have a Congress that passes a budget.
We're still working on. Joe Biden spending watchdog on Wall
Street dot Com