Democrats say President Trump’s proposed tax bill is responsible for pushing up the cost of owning a home as bond markets revolt against the prospect of trillions of dollars in new borrowing added on top of the national debt.
“Trump and Republicans are directly responsible for the spike in the 30-year Treasury bond yield and mortgage rates,” wrote Ted Lieu, the fourth-highest-ranking Democrat in the House as caucus vice-chair.
Fortune reached out to the White House for comment, and will update should it respond.
“This is Robin Hood in reverse: taking resources from where it is most needed, the people who need it most, and giving it to those who need it least,” she noted.
Mortgage rates have been higher, hitting 7.79% in October 2023, according to Freddie Mac.
This peak, however, came shortly after Jerome Powell hiked the Fed funds rate one final time to a minimum of 5.25%.
Starting this past September, his FOMC policy-setting committee has since reduced the overnight interest rate by a full percentage point. Therefore, the current cost of a 30-year fixed mortgage is still very high, given the Fed’s recent easing on the short end of the yield curve.
Investors are gradually reassessing their financial risks under the current administration, especially following years in which money managers overweighted their portfolios in favor of U.S. assets.
“We think there has been a fundamental shift in how institutional investors view their U.S. exposure,” the Swiss bank wrote in a research note on Friday.
It would also eliminate $267 billion that goes to the federal Supplemental Nutrition Assistance Program (SNAP), a.k.a. food stamps.
In return, the debt ceiling will be raised, and the 2017 Trump tax cuts, due to sunset at the end of this year, will be made permanent.
House Minority Whip Katherine Clark said the resulting debt will burden future generations.
“It is taking away health care for nearly 14 million Americans; it is the biggest cut to food programs we’ve ever seen,” the second-highest-ranking House Democrat said on Thursday. “What we have is a bill that is almost like it’s constructed by cartoon villains.”
