In a fiery critique aimed at federal monetary policy, real estate investor Grant Cardone has accused Federal Reserve Chairman Jerome Powell of exacerbating the U.S. housing crisis through persistently high interest rates.
According to Fox Business, Cardone argues that Powell's policies have triggered a decline in housing demand and created a substantial market imbalance. He says these actions ignore the true cause of declining inflation, which he attributes to then-President Donald Trump's past policies.
Speaking on Monday's "Mornings with Maria," Cardone, the CEO of real estate investment firm Cardone Capital, levied his criticisms. He made it clear that he holds the Federal Reserve responsible for the housing sector's troubles, spotlighting the burden that high interest rates place on the middle class.
Cardone believes that the Federal Open Market Committee's recent decision to keep the benchmark interest rate steady has not alleviated the problems facing home buyers. He criticizes this inaction, emphasizing that high interest rates have obstructed market activity by deterring potential homeowners.
According to Cardone, there are now half a million more homes on the market than interested buyers, a statistic he attributes to elevated borrowing costs. Without the incentive of lower rates, many buyers remain sidelined, and housing supply continues to outstrip demand.
He argues that interest rates should be lowered not only to stabilize prices but to encourage investment. Cardone asserts that a drop in rates would inject much-needed vitality into the marketplace, drawing in both buyers and investors.
This situation is compounded by the fact that many individuals are unable to secure homes. The high reserve of properties is principally due to prohibitive borrowing conditions that stall potential transactions, Cardone suggests.
Cardone insists that interest rates alone do not set home prices. He stresses that a surplus in housing must be met with demand, which can only be achieved if borrowing conditions become more favorable for consumers. Promoting a more optimistic outlook, Cardone anticipates that interest rate adjustments could lead to an environment marked by enthusiasm and opportunity—a sentiment echoing policies proposed during Trump's presidency.
Cardone proposes a reversal in rate policy to bolster economic conditions across the housing sector. He points out that attracting investors and enticing buyers with lower rates could instigate a more equitable market balance.
Trump has similarly criticized Powell's strategies, advocating for a full percentage point reduction in interest rates. This aligns with Cardone's belief that such measures could offer much-needed "rocket fuel" to the economy.
Floating investment strategies like incentivizing buyers and increasing market activity, Cardone's analysis pivots on market fundamentals. His recommendations pivot on his belief that moderated rates could enable broader access to the housing market.
Cardone's approach reflects broader concerns about the Federal Reserve's current role in housing. These critiques are underscored by calls for measures that would better balance supply and demand, largely by lowering interest rates.
In his final remarks, Cardone expressed hope that impending policy shifts could stimulate the market. He proposed a return to conditions that had previously driven housing and economic growth, though he attributes these successes to past leadership.
Whether Cardone's arguments signal a broader shift in economic discourse remains to be seen. However, his comments point to an enduring debate over the relationship between federal policy, economic health, and free-market dynamics.