Podcast Summary

Podcast: The David Greene Show – Real Talk Real Estate
Episode: Mortgage Monday | Why the Fed are Keeping Rates High & What It Means for You | Episode 82
Date: September 9, 2025
Host(s): David Greene (A), Christian Bashelder (B)

Main Theme & Purpose

This episode of "Mortgage Monday" on The David Greene Show explores why the Federal Reserve is keeping interest rates high, how those decisions affect mortgages and consumer lending, and what it all means for average Americans. David Greene and Christian Bashelder dig into the mechanics of rate-setting, discuss the failing perceptions around who controls mortgage rates, examine the impacts of current policy decisions (including tariffs), and offer real talk on strategies and opportunities in today's challenging real estate environment.

Key Discussion Points & Insights

1. What Does the Fed Actually Control?

Timestamps: 01:00 – 02:40

• Clarifying the Fed’s Power:
  Christian explains that the Fed doesn't set all borrowing rates (like mortgages or auto loans) directly. Instead, it controls the federal funds rate—the short-term rate at which banks lend to each other.
• Trickle-Down Effect:
  Most consumer rates (credit cards, auto loans, some mortgages) are influenced indirectly via this rate and the broader market, especially the 10-year treasury yield.

“The Fed basically determines the value of money... how accessible it is, how cheap it is, and ultimately controls how much money moves through the banking system.”
—Christian [01:50]

2. Impact of Tariffs and Ongoing Inflation Concerns

Timestamps: 03:15 – 06:40

• Tariffs & Inflation:
  Tariffs increase costs for imported goods, which are usually passed on to American consumers in the form of higher prices—leading to inflation.
• Fed’s Cautious Stance:
  The Fed is avoiding rate cuts due to uncertainty about whether tariff-induced inflation will become entrenched.
• Short-term vs. Long-term:
  While long-term plans should encourage domestic production (potentially easing inflation), the short-term effect is higher consumer prices.

"If the price of goods go up, they're going up. And that's the Fed's goal: to be cautiously optimistic… their argument is that it hasn’t solidified long enough."
—Christian [04:58]

“We should prioritize investing in America. That’s a core concept for building up our economy domestically. The problem is the short term…”
—Christian [04:11]

3. How High Rates Affect Everyday Finances

Timestamps: 06:45 – 11:30

A. Credit Cards

• Most have a direct connection to the Fed's rate, so consumer costs rise as rates do.

B. Mortgages

• Mortgage rates are driven more by the bond market than the Fed, but remain high due to economic uncertainty.
• High rates collide with stagnant or falling incomes, crushing housing affordability for many.

“If you want rates to be high on homes, people have to be making more money at their job... you can't raise mortgage rates and also have people making less.”
—David [08:11]

C. Car Loans

• New five-year auto loans average 7.3% interest; used car loans approach 11%.
• Higher prices and interest shut out many buyers, with repercussions for the whole auto industry.

D. Student Loans

• Many with student debt face fewer relief options and higher costs elsewhere in their finances.

E. Savings

• Higher rates do mean higher savings yields, but most Americans have less in savings than they owe in debt—so this benefit is minimal.

4. Who Really Benefits From High Rates?

Timestamps: 12:40 – 14:50

• Bondholders:
  While higher rates increase returns on Treasury bonds, the majority of Americans don't own significant bonds; it's mainly wealthy individuals and institutions.

“It’s wealthy people that own bonds. Correct. You basically have to have so much money that you’re willing to take a four, four and a half percent return.”
—David [14:24]

• The Flip Side of Debt:
  Every mortgage represents an investment for someone else—often large funds that seek lower, but very safe, returns for huge sums of money.

“If you had $1 million right now and I offered you a 2½% return, would you take it? …the more money you have, the harder it is to invest. These institutions... can’t go find a place to put that pays you ten [percent] returns.”
—Christian [15:14]

5. The Real Meaning of Wealth and Policy Warnings

Timestamps: 16:20 – 18:30

• Money and Productivity:
  David suggests that real wealth is about productivity and well-being, not just piling up dollar bills or home values. Policy should keep people in homes, at work, and avoid systemic decline.

“Wealth is not just how much money you have... Wealth is more about productivity, right? Did we get roads built? Did we get buildings built? Are things clean? Do we have a good standard of living?”
—David [16:38]

• Avoiding a Downward Spiral:
  Foreclosures and economic shocks downgrade real wealth and hurt everyone, including lenders and the wider community.

6. Rates, Demand, and Investment Opportunities

Timestamps: 18:30 – 19:10

• Lower rates alone won't necessarily make home prices spike if policy and economic circumstances keep demand stable.
• Some regions are now ripe for value investing, as distressed or languishing properties can be snapped up at a discount, with the hope of refinancing when rates eventually drop.

“You might have a house reduced by a hundred grand and you go in there and say, I’ll give you another 100 grand less... when rates drop now you can refinance it. That’s some wealth building opportunity right there.”
—David [18:43]

7. Memorable Moment

Christian’s Car Payment Confession

“Have you ever had a car payment at a thousand dollars a month?”
—David
“Me personally, unfortunately, I have actually… yeah, but I shouldn't. But unfortunately with the car that I chose, I do, I have.”
—Christian [10:39]

Notable Quotes Recap

• On the real effect of high rates:
  “All the components of owning a home became worse. But you didn’t make any more money to pay for that, and you didn’t actually fix anything by raising the interest rates.” —David [08:23]
• On the practical use of monetary tools:
  "We can use the tools in our disposal, but it should be based on market data, not we think maybe kinda sorta it might do this." —Christian [06:20]
• On who enjoys higher savings rates:
  "If your savings is more than your debt, you’d probably pay your debt off. So the one area that you win, which is savings, is less impactful in the overall algorithm of wealth building than all the areas that you’re losing." —David [11:49]

Useful Resources Shared

• Contact Christian Bashelder:
  • Instagram: @theonebroker (DMs open) [19:11]
  • Website: 1brokers.com
• Contact David Greene:
  • Website: davidgreene24.com (chat feature available) [19:33]

Closing Tone & Final Thoughts

David and Christian keep the episode lively and relatable, blending practical mortgage guidance with insider economics and genuine, unvarnished takes. The candid interplay—especially around topics like who really owns American debt, the reality of car and home affordability, and the shifting opportunities for investors—makes this a helpful, enlightening episode for both industry pros and everyday listeners.

Best For:
Anyone invested, literally or figuratively, in the current real estate or mortgage landscape; aspiring homeowners; industry professionals seeking honest analysis; and those simply curious about why their borrowing just got more expensive.