Trump calls for negative interest rates

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Two major real estate policies president Trump is supporting

- Negative rates - (trump directly tweeted today)

- Fannie/Freddy restructuring - ( more of administration support)

These are two MAJOR influences in the market, I see there being pros and cons of both curious on opinions on how this influences/impacts values/buyer pools etc

Originally posted by @Victor Vella:

Two major real estate policies president Trump is supporting

- Negative rates - (trump directly tweeted today)

- Fannie/Freddy restructuring - ( more of administration support)

These are two MAJOR influences in the market, I see there being pros and cons of both curious on opinions on how this influences/impacts values/buyer pools etc

I don't know enough about the Fannie Freddie changes to comment. But any significant rule changes may have a ripple affect.

I think negative interest rates are stupid not that I know much about the implications of it. I'm also in lending so I'm biased ;  ) 

Negative or super low rates will only increase asset prices, like real estate. It makes pension funds, insurance companies etc. even more desperate for yield, so they all start trying to do even riskier things or just not make what they need too. 

Lowering rates is one way governments can help ease a recession. So if there is ever a major global crisis and rates are already super low or negative when the economy was decent then governments have already played their cards in the good times. Now they have one less tool when the $%#@ hits the fan. 

Sone countries already have negative rates. 

Now think about real interest rates.  Whats real interest rate? Lets say inflation is 3% and interest rates are 2%. The real interest rate is -1%. If you lend that money for a year at 2% it is not even keeping up with inflation, so the lender is actually negative when you account inflation. Real interest is already negative in many parts of the world and very very low in US.

Remember, funds police or fire pension funds of cities need to get a good return on millions of dollars. With low rates they either don't get that return or do riskier things and potentially the whole pension blows up and all those employees get screwed.