Navarro Sounds Off on Fed
The Federal Reserve cut interest rates this week, but the move wasn’t enough to please everyone. Peter Navarro, senior counselor for trade and manufacturing under President Donald Trump, wasted no time blasting the Fed for not going far enough.
“We’re a hundred basis points, at least, over where we should be,” Navarro said during an interview on Mornings with Maria. He argued that today’s rates have “frozen up” the housing market, hurting families trying to buy homes and stifling trade.
Navarro wanted to see a full half-point cut at this meeting and another half-point at the next one. Instead, the Fed opted for a more cautious step.
What the Fed Did
The central bank lowered its benchmark federal funds rate by 25 basis points, setting it in a new range of 4% to 4.25%. It was the first cut of the year, aimed at cooling a slowing labor market and easing borrowing costs.
Markets largely expected this outcome. The CME FedWatch tool had given a 96% chance of a quarter-point cut and only a slim 4% shot at a bigger move.
Still, with inflation pressures tied to tariffs and supply costs, Fed officials were wary of cutting too aggressively.
Housing Market in the Spotlight
The backdrop for the Fed’s decision is a housing market many experts describe as stuck in neutral. High borrowing costs have sidelined potential buyers and left sellers frustrated.
Real estate veteran Joe Azar, a managing director with Douglas Elliman in Miami, echoed Navarro’s frustration. “Ideally, a half-point cut,” he said, would give buyers the boost they need. He argued that even a small rate drop can make a big difference in monthly mortgage payments and overall affordability.
Azar also pointed out that homebuyers are tracking more than just the Fed’s short-term moves. Many are watching the 10-year and five-year Treasury yields, which influence fixed mortgage rates. The Fed’s actions matter most for adjustable-rate loans, he explained.
Talk of a Housing Emergency
The Trump administration is reportedly considering declaring a national housing emergency. The idea reflects growing concerns over high interest rates, construction costs, and regulatory hurdles that together make housing harder to afford.
Sen. Tim Scott, chair of the Senate Banking Committee, also pressed for steeper cuts. He said lower rates are critical to keeping the economy strong and helping families achieve homeownership.
“The president has done such a good job of moving our country forward,” Scott said, “but one big thing we still need is lower interest rates.”
Navarro Calls Powell “a Disaster”
For Navarro, the issue goes beyond numbers. He accused Fed Chairman Jerome Powell of poor leadership and even partisanship. “People talk about how an attack on Powell is an attack on Fed independence,” Navarro said. “It’s not. It’s Fed incompetence.”
He labeled Powell’s approach a “disaster” and blamed Democrats for supporting decisions that, in his view, block economic growth.
Small Businesses Feel the Squeeze
Former Treasury Undersecretary David Malpass also weighed in, warning that high rates are choking small businesses as well as families. Access to affordable credit, he argued, is essential for entrepreneurs who drive much of the U.S. economy.
Malpass stressed that while modest rate cuts help, businesses won’t feel real relief unless borrowing costs come down further.
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What Comes Next
The Fed’s move leaves plenty of questions. Will Powell deliver another cut at the next meeting? Will lawmakers push forward with a housing emergency declaration? And will smaller businesses and families finally feel some relief?
For now, Navarro and other critics are clear: they think the Fed is moving too slowly and risking the American Dream in the process.
