Is Fed Chairman Jerome Powell on the Way Out? What a 300 Basis Point Cut Would Mean for Miami Real Estate

Federal Reserve Chairman Jerome Powell is once again in the political crosshairs. This time, the controversy surrounds a $2.5 billion renovation of the Fed’s Washington, D.C. headquarters. Critics, including several Republican lawmakers, have accused Powell of misleading Congress about the cost and scope of the project, claiming the renovation includes unnecessary luxury upgrades. President Trump has reportedly seized on the issue as political leverage to push Powell out of office—either through resignation or by invoking a rarely used provision to fire him “for cause.”

President Trump has made no secret of his dissatisfaction with Powell’s handling of interest rates. Since returning to the national spotlight, Trump has advocated for a dramatic 300 basis point (3%) rate cut, arguing that slashing rates from around 4.5% down to 1.5% would save the federal government hundreds of billions of dollars in debt servicing costs. According to his allies, such a cut could result in up to $360 billion in annual savings, although more conservative estimates put the figure closer to $174 billion in the first year alone. Trump’s goal appears to be replacing Powell with a Fed Chair who will aggressively pursue this monetary policy shift.

If implemented, a 300 basis point rate cut would be unprecedented in modern U.S. economic history. The last time the Fed enacted such a large move was during the 2008 financial crisis and again during the COVID-19 emergency response—both times with cuts closer to 100 basis points. A three-point reduction would significantly lower borrowing costs across the board, from mortgages to credit cards to business loans. This would likely lead to a surge in consumer spending, business investment, and home buying. Financial markets would almost certainly rally on the news, with equities, cryptocurrencies, and even gold seeing sharp gains in anticipation of looser monetary conditions.

But such a drastic move isn’t without risks. A key concern is the resurgence of inflation. Many economists warn that a rate cut of this magnitude could reignite inflation, potentially pushing it back above 5% after months of moderation. Another issue is the value of the U.S. dollar. Lower interest rates tend to weaken a country’s currency, and a sudden 300 basis point cut could lead to a rapid 10% drop in the dollar’s value—raising the cost of imports and exacerbating inflation pressures. There’s also the possibility of asset bubbles forming, especially in real estate and tech stocks, as cheap money floods the market.

In Miami, the implications of such a rate cut would be immediate and dramatic. Mortgage rates, currently hovering around 7%, could drop to the low 4% range or even lower. This would significantly boost purchasing power, particularly among first-time buyers and investors. Historically, even a 100 basis point cut can increase housing affordability by 10%; a 300-point cut could make homeownership viable for thousands more buyers practically overnight. Demand would spike, fueling a new wave of bidding wars, rapid price appreciation, and increased development activity—especially in high-growth neighborhoods like Edgewater, Little River, and Wynwood.

However, the downside in Miami would be a further deterioration in affordability. Home prices, already inflated due to limited inventory and migration from higher-cost states, could surge another 20% or more. That would likely push more locals out of the market and exacerbate the region’s housing inequality. On the investment side, commercial real estate—especially multifamily—would benefit from cheaper debt and renewed investor appetite, but office space and retail may see less of a bounce due to ongoing structural challenges.

From a macro perspective, such a cut could energize U.S. GDP growth, potentially pushing it above 3.5% annually. But the long-term consequences could be destabilizing. The move would almost certainly raise concerns about the Federal Reserve’s independence if it appears that political pressure—rather than economic data—is guiding monetary policy. Financial institutions, global markets, and U.S. allies could begin to question the stability and predictability of the Fed, which has long been a cornerstone of global financial confidence.

In conclusion, the rumors of Powell’s resignation—fueled by scandal and political pressure—could mark a turning point in U.S. economic policy. A 300 basis point rate cut would bring short-term relief to borrowers and spark a new wave of growth in places like Miami, but the risks to inflation, market stability, and Fed independence are considerable. Whether this is sound economic strategy or reckless short-termism remains to be seen—but the impacts, particularly on the real estate market, would be both swift and significant.