Be careful what you wish for when you nominate someone to accomplish a specific task.
It’s no secret that President Donald Trump selected Kevin Warsh as Fed chair to cut rates, something he hoped would lead to lower mortgage rates as well.
But thus far, Kevin Warsh has done more harm than good, remarking today that “prices are too high” during a trip to Portugal.
That sent bond yields flying higher, pouring cold water on a recovery from their recent run-up related to the conflict in the Middle East.
The question is will this be a theme, or is Warsh still going to be the accommodative Fed chair Trump was looking for.
New Fed Chair Kevin Warsh Says ‘Prices Are Too High’
We know the Fed doesn’t set mortgage rates. It’s more concerned with short-term rates and directly sets its federal funds rates as such.
However, Fed rate expectations can influence longer rates such as 10-year bond yields and 30-year mortgage rates.
So if the Fed signals that it’s in hiking mode, you might see longer bond yields and mortgage rates rise in anticipation.
Conversely, if the Fed is showing signs of dovishness and possible cuts, you might see mortgage rates front-run that chatter and move lower.
We actually saw this play out last year when the fed signaled the hikes were over and the cuts were coming.
The 30-year fixed mortgage was around 7% and fell all the way to about 6% by September, just as the first cut actually took place.
Then mortgage rates jumped on the news and everyone was confused. Ultimately, other things happened, like an unexpected hot jobs report.
Followed by the expectation Trump would win a second term, and that his policies would be inflationary.
Warsh Was Hired to Be Mortgage Rate-Friendly
So there’s only so much impact the Fed can make, but new chair Kevin Warsh was hired with the express purpose he’d be interest rate-friendly.
Trump has made it no secret he wants lower mortgage rates. He campaigned on it and has repeated it many times since.
He’s said he will get mortgage rates back to 3% (or even lower!), yet that promise has failed to materialize.
And now his pick to do that, Kevin Warsh, is saying stuff that isn’t mortgage rate friendly.
That “prices are too high,” which tells us he thinks inflation is still a threat, and that rate HIKES are the possible answer, not cuts.
That will be the last thing Trump wants to hear, assuming his goal to lower mortgage rates remains a focus.
Will Warsh Get Us Lower Mortgage Rates Eventually?
But Warsh is also a crafty fellow who has been hinting at changing things up and playing ball with the Trump administration.
In the same interview today in Portugal, he noted that “My hope, my aspiration, is that nine-12 months from now we’re going to be using new technologies to understand what’s happening in the real economy in a contemporaneous real time way that positions us as central makers to make better decisions.”
I’ve heard that Warsh wants to look at economic data differently than the old guard at the Fed.
He also believes AI productivity gains will lead to less inflation, which will usher in rate cuts.
The question though is even if this is all somehow true, does it get worse before it gets better?
Do home buyers and existing homeowners looking to refinance their mortgages have to wait for that to happen? And if so, for how long?
As always, it appears to be a bumpy road with twists and turns and no straight shot to relief, no matter who is in charge.
Buckle up.
- Kevin Warsh Throws Cold Water on Lower Mortgage Rates - July 1, 2026
- Mortgage Rates Could Drop as Much as Half a Percent with Basel Re-Proposal - June 30, 2026
- Mortgage Rates Face Big Week of Jobs Data - June 29, 2026