Trump Found a Way to Cut Mortgage Rates (And It Bypasses the Fed)
Ken McElroy Show
Ken McElroy
4.7 • 712 Ratings
🗓️ 13 January 2026
⏱️ 25 minutes
🧾️ Download transcript
Summary
Mortgage rates may not need the Fed to fall—and in this episode, Ken and Danille McElroy break down a little-discussed housing policy move involving Fannie Mae and Freddie Mac that could push rates lower fast. We unpack how this works, why it’s different from QE, and the hidden long-term cost that could reshape housing prices, investors, and affordability.
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ABOUT KEN: Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, and The ABC’s of Property Management. With over two decades of experience in real estate investing, Ken McElroy is passionate about sharing the good life by helping real estate investors grow and prosper. This podcast is a place for Ken to discuss numerous topics connected to real estate investing, including finance, budgeting, the entrepreneur mindset, and creating passive income. Ken offers a wealth of personal experiences, practical advice, success stories, and even some informative setbacks, all presented here to educate and inspire. Whether you’re a new or seasoned investor, the information and resources on this channel will set you on a path where you and your investments can thrive.
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Transcript
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| 0:00.0 | Mortgage rates actually don't need the Fed to fall. |
| 0:06.2 | One policy change could make rates fall fast, but it does come with a hidden cost. |
| 0:11.7 | What we're talking about is a $200 billion purchase of mortgage-backed securities, okay? |
| 0:17.0 | So it hasn't happened. |
| 0:18.2 | Correct. |
| 0:18.5 | Be clear, but Trump has said he is going to have them, Fannie and Freddie, do that. |
| 0:23.2 | Yeah. |
| 0:23.5 | And here's, here's, I just need to give you a short little view of, of how everything came to be. |
| 0:30.0 | So Fannie Mae was created actually as part of the Great Depression. |
| 0:36.1 | So, so this, this, it was created in 1938. |
| 0:40.3 | Now, I think this is important. |
| 0:41.9 | And what was going on during that time? |
| 0:43.4 | The bank stopped lending and the homeownership collapsed, okay? |
| 0:47.4 | So this is really important. |
| 0:49.1 | And what it did is it was buying mortgages from banks to provide liquidity back to banks |
| 0:54.0 | so that they would, |
| 0:54.8 | again, make loans. And that ran pretty well up until about 1968. And then they privatized, |
| 1:01.4 | oddly enough. So Fannie Mae privatized. And, you know, I know this is going back, this is important. |
| 1:07.1 | Then what happened in 1970, they became too powerful. |
| 1:11.9 | And so in comes Freddie Mac, which was actually enacted by Congress. |
| 1:16.4 | And that's when they started trading publicly. |
| 1:18.8 | And it's called the GSC or government sponsor entities. |
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