Grant Cardone: Interest Rates Would Finally Drop If Trump Is Elected

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The Federal Reserve has been holding interest rates steady following an aggressive rate hike in July 2023 in an effort to curb inflation. The high rates make it more expensive to borrow money, and as a result, credit card debt has become more expensive and some prospective homebuyers have been sitting on the sidelines as they wait for mortgage rates to cool.

Although the Fed could lower interest rates as soon as this week, many experts believe this is unlikely. But a Donald Trump presidential win could be the thing that finally achieves lower interest rates, according to Grant Cardone, a private equity fund manager and real estate investor.

Here’s why Cardone believes interest rates would drop if Trump is elected.

Trump Would ‘Hammer the Fed’

Cardone believes that Trump would put pressure the Federal Reserve to lower interest rates.

“Trump will hammer the Fed for lower rates,” he told GOBankingRates. “If he doesn’t get his way, he will try to collapse the Fed and make it part of his executive office. I think it is not a bad idea that the president would control the interest rates of a country, because we can’t be competitive right now. Japan has a mortgage rate of 2.5%. Ours is 7.5%.”

Logan Russell, president of Redvail, a political consulting firm, also believes that interest rates — and therefore mortgage rates — would likely be lower under a Trump presidency.

“When you compare the Trump era mortgage rates to the Biden era rates, the distance becomes apparent,” he said. “At its peak, mortgage rates under President Trump peak at 2.9%. Under President [Joe] Biden, Americans saw their mortgage rates increase to over 7%, while more than doubling the average mortgage payment on a median-value home.”

Russell believes that the Trump policies that kept rates low during his first term would be reinstated if he is reelected, which could lead to lower interest rates in a second term.

“Should Trump take to the White House following November’s election, Americans can likely count on the economic policies of his first term — reducing regulations, opening up the economy and promoting economic growth through tax cuts and a roaring private sector,” he said. “If President Trump’s first term is the blueprint for what’s to come, Americans can take some level of comfort in the coming relief should Trump take to the White House.”

Some Experts Disagree

Not all experts believe interest rates would be lower under Trump — a recent Moody’s analysis predicted just the opposite.

Under a “Republican sweep” election scenario, “the corporate tax cuts reduce businesses’ cost of capital and lift investment and longer-term economic growth, but these benefits are largely offset by higher interest rates,” the analysis states. “Short-term rates are higher given the Fed’s response to the higher inflation, and long-term rates are higher because of the government’s larger deficits and heavier debt load.”

If consumers “are upset now, they will be hopping mad a year from now” about inflation if Trump wins and enacts his proposed policies, Mark Zandi, chief economist of Moody’s Analytics and co-author of the report told CBS MoneyWatch.

Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

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