Affordability and midterms

President Trump is already campaigning hard for the midterms. So far he has announced: (1) $2000 checks to americans coming from tariffs, (2) Fed fund rates will be lower, putting great pressure on the Fed, (3) lower gasoline prices as a consequence of Venezuela’s intervention, (4) lower mortgage rates thanks to $200bn mortgage bonds purchases by the GSEs, (5) which he intends to relist in the market promptly, bringing more money to the U.S. taxpayer (or so he says), (6) he has banned institutional investors from buying single family homes to increase affordability, and (7) this morning, he has announced a cap of 10% on credit card rates, to decrease the payment pressure on Americans, which tend to be heavily dependent on credit for day to day activities. The bottom line can be seen in the chart below: american workers are becoming a smaller portion of the U.S. economic output, which basically means that even though the U.S. GDP is growing at 4%+ (real, 7% nominal) on a quarterly basis, the average american is not feeling that in their pockets. Affordability is getting smashed for the people that vote, and although it’s not clear that those measures will end up being the right ones on the long term, he’s trying hard to get people to vote for him in order to keep the House and the Senate.

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