President Trump Just Made a Big Move That Could Benefit 1 of My Top Stock Picks for 2026
2026-01-12 08:20:00 ET
In August 2023, the U.S. Federal Reserve concluded an aggressive campaign to hike interest rates, which sent the cost of a mortgage skyrocketing to the highest level in two decades. The goal was to tame a soaring inflation rate, and thankfully, it worked, so the Fed has now cut interest rates six times since September 2024.
That isn't fast enough for President Donald Trump, though, who regularly calls for the Fed to cut rates more quickly to bring relief to homeowners. However, he might have found a workaround, as last Thursday, he instructed his representatives to purchase $200 billion worth of mortgage-backed securities (MBSes). These bonds hold thousands of mortgages and are sold to investors.
As is the case with all bonds, a sudden flurry of buying activity will increase the price of each MBS, while decreasing its yield. A lower yield, in theory, will translate to lower interest rates on mortgages, thus helping Trump achieve his goal without help from the Fed.
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