Trump may exert extreme pressure on the Federal Reserve to make a "historic interest rate cut"

Real estate tycoon Grant Cardone is celebrating Trump's victory over Harris and believes that Trump's return to the White House will lead to significant interest rate cuts by the Federal Reserve.

Cardone, the CEO of Cardone Capital, attended Trump's election night party at Mar-a-Lago on Wednesday night. When Trump announced his victory, he stated that Trump would quickly address the housing crisis facing the United States.

Speaking about Trump in an interview with Fox Business on Wednesday, Cardone said, “We have a massive real estate problem in our country—he (Trump) knows that.”

“The only way to alleviate this issue is for (Trump) to put immense pressure on the Federal Reserve to force them to cut rates, and I believe he will do that,” Cardone continued. “I believe we will see rate cuts in the next 12 months, and they will be historic cuts.”

Cardone stated that lowering interest rates would not only revive the stagnant U.S. real estate market but also alleviate the commercial real estate debt issues facing the country. He believes that the current mortgage rates, which are close to 7%, must be reduced to 4% or lower.

The real estate investor, who has a property investment portfolio worth over $5 billion, predicts that shortly after Trump returns to the White House in January, the Democrats will pressure the media, claiming that the U.S. is in a recession and that unemployment numbers are terrible.

Cardone said, “You will see all these headlines making it difficult for him (Trump), but this will actually help him lower rates and address housing and commercial issues. Therefore, I believe Trump will be very beneficial for real estate. In fact, I think he is the only one who can solve the problem.”

What can and cannot Trump do to the Federal Reserve if re-elected?

Trump's potential re-election as President of the United States has raised questions about whether he will seek to limit the independence of the Federal Reserve, as he has previously stated that he wants to have a “voice” in interest rate matters. He will allow Federal Reserve Chairman Jerome Powell to serve out his term but will not reappoint him.

The most direct power a U.S. president has over the Federal Reserve is through appointing candidates to fill vacancies on the board and appointing them to key positions within the agency, including the chair. Powell's term as chair will end in 2026, and Trump will have the opportunity to appoint a new Federal Reserve chair. Powell's 14-year term as a board member will end in 2028, which will be one of two scheduled opportunities for Trump to appoint members to the Federal Reserve Board.

Another opportunity will arise in January 2026, when Federal Reserve Governor Quarles' term ends. However, these two positions are just a small part of the 19 decision-makers at the Federal Reserve (all Federal Reserve governors and the 12 regional Federal Reserve presidents).

Additionally, the Federal Reserve governors, chair, and vice chair appointed by the president must be confirmed by the Senate, which serves as a check on the candidates. The Republican Party, to which Trump belongs, gained control of the Senate in the elections on November 5, but during the previous presidential term from 2017 to 2021, the Republicans also held a majority in the Senate, and opposition from lawmakers caused some of his Federal Reserve nominees to fail The most direct way to convey a message to the Federal Reserve is to remove its chairperson. Trump discussed doing so in 2018 when he was angry about a series of rate hikes by Powell. However, legal scholars say that the president cannot easily remove the chairperson of the Federal Reserve