Vice President J.D. Vance said Thursday that the Federal Reserve should lower interest rates to make housing more affordable, saying President Donald Trump is increasing pressure on the central bank to reduce borrowing costs.
The remarks came days after Kevin Warsh, President Trump’s handpicked choice to lead the Fed, hinted at the possibility of the opposite move: raising interest rates to combat persistently high inflation.
“Obviously the president is very concerned about interest rates,” Vance said at a White House press briefing, when asked by CNBC’s Eamon Javers about the Trump administration’s views on the volatile U.S. debt market.
“One of the main reasons why he cares so much about interest rates is because he wants Americans to be able to buy homes,” Vance said, referring to Trump. “Rising interest rates mean higher borrowing costs.”
“We believe the Fed should lower interest rates,” he said, calling it an “appropriate and responsible” response to recent U.S. inflation data.
“We’re doing a lot to lower interest rates, and it would be nice to get some help from the Federal Reserve,” Vance added.
Mr. Vance’s comments could heighten concerns that the Fed’s independence will be undermined under the Trump administration, which has aggressively pushed his predecessor to lower interest rates and is plotting to fire Governor Lisa Cook.
Less than a week later, Mr. Warsh said he was committed to getting inflation back to the Fed’s 2% goal and considered it an important tool for keeping interest rates in check.
“Short-term interest rates are the primary means of achieving dual mandates,” he said in a speech in Jackson Hole, Wyoming.
Vance’s remarks come less than two weeks before the Federal Open Market Committee meets to decide whether to adjust interest rates.
The outcome of the meeting is far from certain. According to CME Group’s FedWatch Index, traders are almost evenly divided on the likelihood of a rate hike at the September 15th and 16th meetings.
Fed Governor Michael Barr said Tuesday that he was prepared to support rate hikes if inflation remained high.
But on Thursday morning, Governor Christopher Waller said interest rates were likely to remain unchanged.
