Fed continues rate freeze, faces heat from industry
Fed officials left the benchmark rate unchanged at 4.25 to 4.5 percent, citing tariff-related uncertainty and cautious inflation signals, the Wall Street Journal reported.
But dissent is growing. For the first time since 1993, two dissenting board members voted in favor of a cut, a rarity likely foreshadowing movement at the Fed's September meeting as pressure mounts from the White House and the market.
In real estate circles, there's no ambiguity that rate relief can't come soon enough.
On CNBC Wednesday morning, the LeFrak Organization's Richard LeFrak likened housing affordability to gas prices — something Americans feel viscerally — and called for rate cuts to ease the burden on builders and buyers alike.
'It would be helpful to increase the supply of housing for interest rates to go down,' he said, framing the crunch as rate-driven as much as it is policy-driven.
That pressure is acute in housing. This year's spring sales season was the slowest in 13 years, according to Bloomberg, with mortgage rates still stuck near 7 percent and affordability near its worst levels since the 1980s. Some buyers are backing out entirely.
Developers and brokers nationwide are increasingly vocal in calling for lower borrowing costs to unlock supply and jumpstart stalled transactions. LeFrak, active in luxury and multifamily development, said rate-sensitive projects remain on hold in many markets. 'Do I think rates should be lower? Yes,' he said.
Fanning the flames, the Fed's decision Wednesday also came on the heels of the surprising news that the U.S. economy expanded at a 3 percent annual pace in the second quarter, topping Dow Jones' estimate of 2.3 percent.
'2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! 'Too Late' MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!' President Donald Trump posted on Truth Social Wednesday morning.
Still, Fed Chair Jerome Powell and his colleagues are wary of easing too soon. Inflation has cooled, but not decisively (the annual rate was 2.7 percent in June 2025, the highest level since February). New tariffs, consumer spending and labor market data could all tilt the scales in either direction.
— Judah Duke
Homeowners hoping for mortgage rate drops stuck with bad bets
Jerome Powell asks for probe into Federal Reserve's $2.5B HQ renovation
Richard LeFrak to step back from day-to-day role at firm
This article originally appeared on The Real Deal. Click here to read the full story.
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