The (New) Reason Why The Fed Is Getting Worried

"our economy in 2025 added the lowest number of jobs that we have seen since 2003, more than two decades ago."

"President Trump announced that he is demanding Fanny May and Freddy Mack to now start buying mortgage bonds. But not just that, that he wants them to buy $200 billion worth of mortgage bonds as a way to drive mortgage rates lower so more people can then go out and buy a house as a way to stimulate the economy."

"And a big reason for that is because of AI. Corporations are saying instead of us going out and hiring more people, how about we try to employ AI agents as a way to reduce costs?"

"And this is where we just got some new data which shows that now it seems less likely that the Federal Reserve Bank is going to cut interest rates in January."

"Well, the chairman's term is going to expire this May. [...] And President Trump has made it very clear that he wants to replace Jerome Powell, who is the current chairman at the Federal Reserve Bank, with somebody who is going to agree with what President Trump says."

"And so what President Trump is now demanding is that Fanny May Freddy Mack take that $200 billion and they use it to go out and buy more mortgages."

"according to UBS, the bank, what they say is that this move can bring mortgage rates down by somewhere between 0.1% to 0.25%"

"and President Trump will likely have more influence on what the Federal Reserve Bank does."

"Companies are not hiring the way that they were and there's a lot of changes happening in the job market, especially due to AI."

"And what he's doing now is he's asking Fanny Man Freddy Mack to use their reserves to go out and buy more mortgage bonds as a way to make getting a mortgage cheaper, as a way to incentivize banks to go out and issue more loans, to issue more mortgages sooner."