The director of the Federal Housing Finance Agency (FHFA) took to social media Monday to tell Federal Reserve Chair Jerome Powell that it’s time to resume the central bank’s interest rate cuts.

FHFA Director William Pulte took a page out of President Trump’s playbook in putting political pressure on the Fed to lower rates.

“Jay Powell needs to lower interest rates  — enough is enough,” he wrote. “President Trump has crushed Biden’s inflation, and there is no reason not to lower rates. The housing market would be in much better shape if Chairman Powell does this.”

Trump has been calling for interest rate cuts for months in light of his trade war and new tariff policies, which many companies and business groups are saying will compel them to raise their prices. Retailers are expecting to raise prices in the near future in response to tariffs, according to the Fed’s last beige book, an anecdotal survey of business conditions.

“This would be a perfect time for Fed Chairman Jerome Powell to cut interest rates. He is always ‘late,’ but he could now change his image, and quickly,” Trump said in early April. “Cut interest rates, Jerome, and stop playing politics.”

The Fed started cutting interest rates in the back half of last year after leaving them elevated for about a year in response to the post-pandemic inflation.

After inflation showed signs of life last fall, the Fed paused its rate cuts in January and has left them at a range of 4.25 to 4.5 percent since January.

In maintaining the pause, Powell has also cited Trump’s trade war, which has been executed by the White House in fits and starts, as contributing to an environment of economic uncertainty.

“Tariff announcements and heightened uncertainty about government policies in general are the dominant economic developments of more recent weeks,” Powell said earlier this month.

Higher interbank lending rates slow economic activity by making it more expensive for businesses to borrow money and make investments. 

This tightening of credit eventually hits workers, who count as an overhead cost. Workers then have less disposable cash and make fewer purchases, which encourages companies to slow their rate of price increases, thereby combating inflation through reduced demand.

But while this process plays out, the higher interest rates also make consumer financing more expensive, which increases the cost of housing in particular. The housing sector tends to lag behind the prices movements in other sectors of the economy.

Mortgage rates have been hovering around 7 percent since 2022. The 30-year fixed rate mortgage is now at 6.86 percent, according to government-backed mortgage provider Freddie Mac.

Shelter inflation as a component of the consumer price index (CPI) has fallen to a 4-percent annual increase, maintaining that level from March to April. Headline inflation is almost half that rate, having dipped to a 2.3-percent annual increase in April, off a recent high of 3 percent in January.