The Federal Reserve should cut interest rates to make homes more affordable, Vice President JD Vance said Thursday, adding to the pressure President Donald Trump has placed on the central bank to cut borrowing costs.
The remarks came days after Trump’s handpicked Fed chair, Kevin Warsh, hinted at the possibility of doing the opposite: addressing persistently high inflation by hiking rates.
“Obviously the president cares a lot about interest rates,” Vance said at a White House press briefing when asked by CNBC’s Eamon Javers for the Trump administration’s view on the volatile U.S. bond market.
“One of the main reasons he cares a lot about interest rates is because he wants Americans to be able to afford a home,” Vance said, referencing Trump. “When interest rates go higher, that means that borrowing costs are higher.”
“We believe that the Fed should be lowering interest rates,” he said, calling it the “proper and responsible” response to recent U.S. inflation data.
Vance added, “We’re doing a lot of things to try to keep those interest rates down, but it would be nice to have some help from the Federal Reserve.”
Vance’s remarks may add to concerns about the erosion of the Fed’s independence under Trump, who aggressively pushed Warsh’s predecessor to slash rates and is trying to fire Governor Lisa Cook.
Less than a week earlier, Warsh said he is committed to bringing the inflation rate back down to the Fed’s 2% target, and sees interest rates as the key tool to rein it in.
“Short-term interest rates are the predominant tool to achieve the dual mandate,” he said at a speech in Jackson Hole, Wyoming.
Vance’s remarks came less than two weeks before the Federal Open Market Committee is set to convene and decide whether or not to adjust rates.
The outcome of that meeting is far from certain: Traders are about evenly split on the odds of a rate hike at the Sept. 15-16 meeting, according to CME Group’s FedWatch gauge.
On Tuesday, Fed Governor Michael Barr said he would be prepared to back a rate increase if inflation stays elevated.
But on Thursday morning, Governor Christopher Waller said he is more likely to keep rates steady.
