President Personally Implements QE? Trump Announces $200 Billion Mortgage-Backed Securities Purchase Plan

In a surprising move, US President Trump announced the launch of a $200 billion mortgage-backed securities (MBS) purchase plan to lower mortgage rates and ease the housing affordability crisis. Market observers see this as Trump's personal version of quantitative easing (QE) outside of Fed rate cuts.

Trump posted on Truth Social that he has instructed representatives to purchase $200 billion worth of mortgage-backed securities to reduce mortgage rates and monthly costs, increase homebuying ability, and blame the current housing crisis on the Biden administration.

US Housing Finance Agency Director Bill Pulte confirmed to the Financial Times that the plan will be executed by Fannie Mae and Freddie Mac without requiring congressional approval. Under current agreements, the two entities still have a combined operational space of around $200 billion in mortgage investments.

Analysts note that this move bears a striking resemblance in form to the Fed's policy of stabilizing the market by purchasing MBS after the 2008 financial crisis. Despite the Fed cutting rates by a total of 75 basis points, the current US 30-year fixed mortgage rate remains high at 6.16%, with housing costs continuing to be a political and economic focal point. Against a backdrop of high inflation and rising living costs, Trump's actions are seen as an attempt to directly intervene in the housing and financial markets through executive power to boost voter confidence.

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