The Fed’s Endless Addiction: Why Trump Won’t Let the Housing Bubble Pop | 1/14/26

Trump delivered a major economic speech yesterday, in which he advocated for all the policies that created inflation, fake wealth, and the K-shaped economy to begin with. He wants endless near-zero interest rates and more juicing of the housing and stock-market bubbles. Also, everything he is doing is executive actions with no plan to codify them in Congress. Next, I explain how Bibi Netanyahu is pushing for a phaseout of aid to his country, while Trump shockingly opposes it. Our main discussion today is about letting the housing bubble deflate on its own. We’re joined by Melody Wright, a mortgage finance and housing policy expert, who explains how prices are already coming down. There will be a crash, but on balance, that is a good thing. The problem is that everything the government is doing will lead to price increases. Trump is also misdiagnosing the problem as one of interest rates and supply. In fact, developers have overbuilt in most parts of the country. Rather than treating the delayed symptom of corporate ownership, the time has come to treat the cause, which is government ownership of housing. Let the bubble pop!

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