Chairman Powell of the Federal Reserve announced a .25% easing of the Federal Funds Rate today (10/29/2025). He also indicated the Fed will stop shrinking its balance sheet for mortgage-backed securities (MBS). Instead of letting maturing MBS run off, the Fed will reinvest in short-term Treasury bills to shorten Fed Asset duration risk.

While inflation remains somewhat sticky and labor market is softening, the housing market ($55 Trillion in assets) is stuck in the mud due to unaffordability to new entrants. This has been reinforced by mortgage rates in the 6.5-7.5% range since 2022.

There has been serious discussion of declaring a National Housing Emergency. Unlocking federal funding, streamlining of zoning and building codes nationwide, and providing a framework to shoulder some of the insurance risks that permeate consumer’s premiums are some of the proposals on the table.

Look for Housing to be a big focus on domestic macroeconomic policy as we head towards the new year. Can’t be careful and late.