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- [00:00]
David Green
Welcome to Real Talk Real Estate, the show where we cover how to build wealth in real estate with no fluff, no BS and no sales pitches. I'm David Green and I've been doing this for over 10 years. I've seen the ups, the downs, and everything in between. This is the show where we pull back the curtain and show it to you, too. So if you want to build wealth through real estate or you just love learning about it, you found your home. What's up, everyone? Welcome to Real Talk Real Estate. This is Mortgage Monday. I'm David Green. He's Chris Ambassador. We are the one brokerage and we have got a show that should put a smile on some of your faces today. Put a smile on mine because freaking hilarious. Donald Trump and Jerome Powell are back at it again. It was first Donald Trump and Elon Musk. Now it's back to Donald Trump and old JP and this is relevant to you and mortgages because the head of the Fed, Jerome Powell, has a lot of power over what happens with overall interest rates, which indirectly affects mortgage rates. We're gonna be talking about that today. But before we do, Christian, how's your week been?
- [01:01]
Chris Ambassador
It's been good. Everybody's kind of patiently waiting for who's. Who's kind of affectionately called the most powerful financial man in the world, right? Jerome Powell. And he's kind of known as when the guy speaks, everybody sits up straight and listens. Right. I guess him and and rocket man over in North Korea. Right. Trump always says, I want my people to sit up straight like they do in when Kim Jong Un speaks in America. We sit up straight when Jerome Powell speaks. So he's kind of our Kim Jong Moon, which is a very weird comparison. But there's David doing the Trump. If you guys are listening on a podcast, David is doing his best Trump dance impersonation right now. It's a should check us out on YouTube if you want to see. See that live.
- [01:41]
David Green
I was telling my mom yesterday because I went back to California for my grandma's funeral and we were all together and I was saying I'm kind of sad that when he's not president, whoever we get is just going to be boring. There's never been a person that I.
- [01:55]
Chris Ambassador
Was genuinely said about that.
- [01:57]
David Green
Right. It's not politics doesn't suck. I mean, if you don't like Trump, you're probably mad. But you'd be mad no matter who's in there that you don't like. At least with him, I will laugh. It is entertaining. It's kind of crazy. I just. Whoever we get next, they're going to probably be really polished and say all the right things and not tell you anything when they're talking. You know, like when you get the athlete after the sports game and they're like, how come you guys couldn't stop him in the third quarter on defense? And he gives a non answer. Right. Like that's what politicians typically do. At least with this person, they tell you exactly what they're thinking. Love it or hate it. I like that part.
- [02:30]
Chris Ambassador
So let's talk about with the, with, you know, the whole Israel, Iran thing where he said, nobody knows what I'm gonna do. I don't know what I'm gonna do yet. You want to know what I'm gonna do? Right? He was totally just like egging on the interviewer. It's so funny.
- [02:43]
David Green
That is a perfect example. You think I'm gonna tell you? You think I'm gonna tell you right now so you could go tell them what we're gonna do? Is that the way you think that this work? Everyone else would imply that's why they're not. They would just not answer the question. And the implication was, we don't want the enemy to know when you're asking. But he came right out there and said it. All right, so let's get to this article of Trump sharing a handwritten note to Jerome Powell. You have cost the USA a fortune. President Trump on Monday shared a handwritten note to Fed Reserve Chair Jerome Powell urging him to lower interest rates. His latest attempt to push the central bank to do so. Before we get into this, it does remind me when we hear about Trump sending a handwritten note urging them to lower rates, which he's been doing for a while. He makes true social posts or Twitter posts and he says things through the media to Jerome Powell. It's kind of like when you're like 8th grade junior high girlfriend is threatening you and she's like, you are going to go hang out with me and my friends at this thing and if you don't, you're not coming to my birthday. It has that energy to it, which I don't. Maybe it's just me. I find this to be extra hilarious because they're actually both very intelligent people.
- [03:51]
Chris Ambassador
I was totally imagining the same thing. Like when you pass the note, you know, it's like you hear through your friends, like, oh, she's got a crush on me. But then she writes that note, will you date me? Check yes or no. Right? Like the written portion Always has a little bit more power, right? It's like, oh, it's in writing. It's legit, Right.
- [04:07]
David Green
Question. Question for you, Christian. Did you receive more of those notes or did you send more of those?
- [04:12]
Chris Ambassador
Oh, for sure. Sent them by a wide margin.
- [04:17]
David Green
That's good.
- [04:18]
Chris Ambassador
I was, I was, yeah, high school me was a, was a fun one.
- [04:23]
David Green
So they were still sending notes in your generation, you guys weren't texting yet?
- [04:26]
Chris Ambassador
Oh, for sure. I had a, I remember the big phone that came out when I was in high school was the, was the razor and the, the sidekick. I was like, all the cool kids had razors and sidekicks and the other.
- [04:37]
David Green
Uncool kids had binders with paper that they would write notes on. But you're a bit of a romantic, you know, you're a Romeo.
- [04:43]
Chris Ambassador
You know, I, I could, I could draw a couple boxes for yes or no questions. For sure.
- [04:47]
David Green
Well, your lead generation skills were developed at the tender young age. In high school.
- [04:52]
Chris Ambassador
I was, I was practicing my sales skills.
- [04:54]
David Green
I didn't know. Trump posted on True Social complaining that Powell and the rest of the Fed Reserve Board of Governors should be ashamed of themselves for declining to lower interest rates. They have one of the easiest yet most prestigious jobs in America and they have, in all caps, failed and continue to do so, Trump wrote. According to the Post was an. Attached to the post was an image of interest rates set by other central banks around the world, which Trump had written on in Sharpie to deliver a message to Powell. Jerome, you are, as usual, in quotes, too late. I find it funny he put too late in quotes. I don't see why that would need to be in quotes. Is he referring to, like, did he say that at other times? He's quoting himself.
- [05:36]
Chris Ambassador
I'm pretty sure that's exactly what's happening.
- [05:38]
David Green
It's like he's turning his own line into a quote by putting quotations marks. If I say it enough, everyone will think this is like his Jerome, too late, pal. You have cost the USA a fortune. And I don't know why he capitalized the A in a fortune and continue to do so. You should lower the rate by a lot, Trump wrote. Hundreds of billions of dollars are being lost with no inflation, he added. Along with his signature, Trump also added a handwritten annotation to argue the United States should be among the countries with the lowest interest rates at 1.75% or less. Fed officials kicked off the year expecting to continue cutting interest rates as inflation drifted back toward its ideal annual level of 2%. But the bank has held off through the first half of 2025amid the uncertainty driven by Trump's tariff plans. Pal reiterated his call for patience Wednesday after the Fed kept rates steady. Once again, Trump has for months railed against Pal, nicknaming him too late. Oh, there it is.
- [06:38]
Chris Ambassador
You knew it was coming.
- [06:39]
David Green
Yeah. We didn't read this article before we went over it because we wanted to experience it for the first time with all of you. If I read something first or watch a video before I react to it, it's hard to get an honest reaction like you can tell that you're acting. So we do try to not read the article before we bring it up on the show. And bemoaned the Fed's decision to keep interest rates steady. Trump has mused about firing Powell, who he appointed to the job in 2017. Powell's term ends in 2026. All right, Christian, let's break this down. Why is it that Powell does not want to raise rates? And what. How does that relevant when tariffs are involved, which the article mentioned?
- [07:18]
Chris Ambassador
Yeah, so we're actually in a very interesting point right now because the Fed's actually doing the opposite of what history says they should. Now, that could be a good thing or bad thing, but what the Fed will typically do is they will monitor two measurement points. They'll monitor unemployment, and they'll monitor inflation. And typically, those are inversely related things. Right. When unemployment goes high, that means a lot of people don't have their job. That means inflation is low because people are spending less money because there's less velocity of money moving through the economy, and vice versa. When there's very low unemployment, that means there's a lot of money moving, a lot of people are employed, a lot of people are spending. And the Fed, the lever they pull is the interest rates to kind of keep those two in balance. Well, what we're seeing right now is a very favorable scenario for lowering interest rates, which is low unemployment, which means people are unemployed, and inflation is coming down. And typically, as inflation comes down, which has come down significantly since, you know, two, three years ago, typically unemployment will start to drift up. And, and it's not really happening yet. So we have a perfect scenario to, to drop rates, stimulate because we can take a little bit more inflation because unemployment is low. So the reason why it's not happening, that's what happens historically, the reason why it's not happening now is that Jerome Powell has made his stance very clear that he feels the impact of the tariffs are not felt yet. And while he admitted in his last press briefing that he doesn't know how they will impact it. Maybe companies will just absorb it. Maybe, you know, we'll offset it with this new bill, who knows? But what he's saying is the future impact of the tariffs are unknown. So we are conservatively and proactively limiting any increase. I say increase, but it's a decrease. Right. You increase the money supply by decreasing rates, but we're limiting the decrease of interest rates to potentially withstand the inflation that comes from tariffs. The tricky part is that it hasn't happened yet. And Trump's counter to that is, fine, if inflation goes up, then raise interest rates then, but why are we doing it now? And the reason why Trump's pushing so hard, obviously he wants approval ratings and mortgage rates and all that, but the big thing staring us in the face is we have to refinance. I think it's 9 trillion of debt this year, and I think the numbers show that we're saving like 8 to 900 billion dollars in interest if we drop rates by a percent.
- [09:46]
David Green
Yes.
- [09:47]
Chris Ambassador
And that's what Trump's really pounding the desk for. Right. Is you're costing America a substantial amount of money on the conception that you may think what's coming. Instead of saying, let's react to what's here now and in the future, we can react to what happens then like the Fed always does, but we're limiting the action of the Fed in real time by taking the future into account. And that's. That's ultimately the big argument happening right now, which is why the, the nicknames and the quotes are being thrown around. Right. The too late over there. That's.
- [10:25]
David Green
He didn't answer the phone. He answered too late.
- [10:28]
Chris Ambassador
That's right. And that. That's a big argument. He's saying that instead of dropping them now and responding later, you're too late in saving America money and getting better interest rates and, you know, infusion of capital into the American economy. That come with lowering interest rates.
- [10:42]
David Green
Yeah, because that money was lent out at a very low rate and it's now being repaid at a higher rate, which is what you always want to avoid in finance in general. You don't want to be borrowing money at a cheap rate and paying it back and an expensive one. And that's what happened when we raised the rates. Now, I'm sure what Powell's thinking is, hey, if I lower rates, that could lead to inflation, and the tariffs that were just put in place could also lead to inflation. So I don't want to do things that would make inflation worse when there's already things being done that could make inflation worse. But in the meantime, the national debt grows and grows and grows. I mean, we're barely making interest payments on it. We're definitely not paying it down. And now with the big, beautiful bill, in order to try to get the economy going again, I'm also now speaking where I'm not entirely sure I'd have to. I haven't read the whole big beautiful bill. I don't think anybody has. But the idea here is we're increasing the national debt in order to spend money on things that should get the economy going, which would make the average American wealthier. That's the hope, at least. But if we're increasing the national debt and we have to pay higher interest rates when we do it, that's a double whammy. Yeah.
- [11:51]
Chris Ambassador
There's not really a winner. That's the argument.
- [11:52]
David Green
100%. Yes. So Trump is now writing handwritten notes to Powell, which somehow made their way into the news. Like, how do you think that happened? Do you think that one of Trump's staff took a picture of it? Do you think that someone on Jerome Powell's team got really mad about it and they took a picture of it? How did this go down in your mind?
- [12:09]
Chris Ambassador
Gosh, I don't even know. I mean, I just think, you know, maybe one of his, you know, his. His assistants or one of his, you know, think. People always says, I surround myself with very brilliant people, right? Maybe one of those brilliant people got one of those. Those date letters in. In high school, right? They were like, hey, you know, I got a crazy idea. He's clearly not responding to anything you do on True Social or on Twitter or X, whatever it is. Now, why don't we do something crazy? Let's say, will you lower interest rates? Check yes or no thread. Yeah, I don't know. I. I think he's just kind of pulling out all the stops. And, you know, Trump obviously likes to, you know, make a little bit of a scene here and there, Right? And that's. That's kind of headline grabbers, right? Like, Trump writes personal note to Jerome Pal, calling him a doofus. Right?
- [12:55]
David Green
Well, I. Not that anyone asked, but I think we do need lower, at least mortgage rates. I've often wondered if there's a way to lower mortgage rates without lowering the Fed rate. Is there a way that you can divorce those two things and create an incentive for companies to buy paper on mortgages, maybe give him a tax credit or Something I would think Trump might be thinking of this if he wasn't so busy with Israel and Iran and strikes on Iran's nuclear facilities and Russia and Ukraine. And it's like there's always something happening outside of America that pulls our attention there, where it makes it hard to focus on what has to be done here. But our economy is starting to run out of steam. It's bad. And I think we are going to be seeing a lot of foreclosures. If you could drop rates down to say like high Fords, low fives, you could get people refinancing where they might have let their house go, but they're like, shoot, if I can get out of a seven and a half, eight and I could get into a five or a four and a half, now it makes sense to keep it. Or rather than losing it, someone will buy it because they're like, rates are at four and a half and you'd get a whole new, like, wave of buyers coming in and taking properties off the hands of the people that bought them previously. Like say a short term rental that somebody bought at 8% thought they can make it work and they can't, but someone else can make it work at 4%. So you lower rates of 4 and a half and then the seller gives a credit to the buyer. They get it at half the rate. Now that doesn't go to foreclosure. The seller keeps their credit, the buyer gets a better deal. Theoretically, the person who's going to be renting the place could get it at a better price because it's less expensive for the buyer. Everybody wins. And we don't have to keep them.
- [14:22]
Chris Ambassador
Going through the foreclosure process. Literally everybody.
- [14:25]
David Green
Right, everybody wins. Exactly. And you don't have to keep them there forever. We don't. It's not going to be a bubble. We don't want to fuel this. Oh, we have housing prices going crazy. You drop them for a time, you tell everyone, limited time offer, get in. Now it's going up at this percentage every six months or every year as a, as a baseline. And then if they want to adjust off of that baseline, up or down, obviously based on the numbers that they can. I just think that would bring so much stability to the housing market. You'd get buyers that felt good about buying again. You'd get sellers that were like, oh my God, thank God I got out of that thing, I lost some money, but I didn't get completely destroyed. The banks don't have to step in and foreclose and then you don't see the private equity institutional capital coming in and scooping up all the inventory so mom and pops can't get it. So hopefully somebody can get this message in front of the people making these decisions and they will pay attention because I think it's worse than what I imagine people in Capitol Hill are seeing, at least in certain parts of the country Now. Christian, if people want to reach out to you and they want to say, hey, where should I buy? What kind of loan products are available for me to buy? I want to buy a primary residence or my aunt does and I don't want her to get ripped off. Where can they go to get a hold of you?
- [15:32]
Chris Ambassador
Yeah, absolutely. Even if you want a breakdown of Jerome Powell's next next love letter he gets right. We can talk about it. If you want to reach out to me directly. Best way is Instagram direct message. My handle is at the one Broker and you can always find more about our company and everything that we offer@the1brokerage.com Very good.
- [15:50]
David Green
Y and if you're a high school student listening to this because you care about financial literacy and you want advice on how to send a note to a girl that you like, we gotcha. Christian will take those calls as well. You can find me at David Green24 on all social media. Send me a DM or go to DavidGreen24.com and use the chat option to get a hold of me and let me know what your goals are with real estate and how I can help you. Whether that's joining a mastermind of other real estate investors getting involved in my faith based mastermind getting great financing on your real estate or just getting some advice on what the heck is going on. So go give Christian a follow at the one broker with underscores in between give me a follow at David Green 24 and we will see you guys next week on Mortgage Monday. Sam.