“What a long, strange trip it’s been…”

“Marketplace” host Kai Ryssdal and I had the same thought this weekend, which started with news of the death of Grateful Dead cofounder Bob Weir and ended with the news that Jerome Powell, chair of the Federal Reserve and avowed Deadhead, was under criminal investigation by the Department of Justice.

Powell himself announced the news, and said the Trump administration was using the ongoing Fed headquarters renovation as pretense to escalate its pressure tactics for lower interest rates.

President Donald Trump has already directly lobbied the independent central bank, hurled insults at the man he appointed to run it and even put on a hardhat to tour the construction site at issue himself. Trump has denied any knowledge of the Powell investigation, though he’s already tried firing Fed Governor Lisa Cook for unproven allegations of mortgage fraud from Bill Pulte, his fundraiser housing regulator. The Supreme Court is set to hear Cook’s case soon. 

President Donald Trump is fixated on interest rates. And he seems to think it’s going to help the housing market if he succeeds in pressuring the Fed to cut rates.

At a cabinet meeting over the summer he said high interest rates are “the only problem with housing,” and that if he’s able to get a majority on the Fed board of governors and get interest rates down “housing is gonna swing and it’s gonna be great.”

If you listen to Marketplace regularly, you know that when the Fed cuts interest rates it doesn’t necessarily mean that mortgage rates come down. That’s because the interest rate the Fed sets is for short-term debt, and mortgages are long term, usually 15- or 30-year loans.

“Thirty-year mortgage rates tend to track very closely with the 10-year Treasury,” said Daryl Fairweather, chief economist at Redfin. She says most people who get a 30-year mortgage tend to either pay it off, refinance, or move within ten years.

“So they tend to track really closely together,” said Fairweather.

And one of the key factors that drives the yield on 10-year Treasury bonds is expectations about where inflation might be headed over the long term.

“The issue with the government intervening with the Federal Reserve's operations is that if the Federal Reserve were to start doing what the government wanted it to do, then investors would get really nervous about long-run inflation,” said Fairweather.

Just because the president wants lower interest rates doesn’t mean that lower interest rates would be good for the economy.

Jorge Barro, an economist with the Texas Real Estate Research Center at Texas A&M University, says if investors do start to question the Fed’s independence and credibility and get nervous that inflation’s going to rise over the long-term, “I think it's likely, and there are historical studies that indicate, that that begins to impact financial markets. We start to see interest rates start to rise.”

Especially on bonds and longer-term loans.

“It likely would make it a little bit harder to finance expenditures -- business loans, car loans, credit card loans,” said Barro. And mortgages, as inflation expectations get built into interest rates.

Blinder was one of many experts we talked with before the 2024 election about potential threats to Fed independence in a second Trump term, and he’s far from the only former Fed official defending Powell today.

Warner Bros. Discovery again rejected a $30-a-share merger offer from Paramount Skydance last week, telling shareholders Netflix’s offer for just the company’s studio and streaming assets was better (the conglomerate’s cable channels would be spun off).

Paramount sued today to compel WBD to share more of its rationale, and launched a proxy fight to push its takeover bid. If you don’t remember when the Waystar-Royco board went to war for the future of the company, refresh your memory on how these proxy battles work and learn what the bidding war could mean for your movies and TV in the coming years.