» What the Fed Didn’t Tell You: Inside the $43B Treasury Purchase That Could Move Mortgage Rates

Published: May 30, 2025

In May, the Federal Reserve purchased $43.6 billion in U.S. Treasury securities, including nearly $9 billion in 30-year bonds, without issuing a formal announcement. While these purchases are technically public record, the lack of public-facing commentary or media coverage has led some analysts to describe the move as “stealth quantitative easing,” a term that refers to the Fed’s actions to stimulate the economy by increasing the money supply, but without the usual fanfare associated with such measures.

The transaction is raising questions not only about the Fed’s near-term strategy but also about what it could signal for mortgage interest rates and the broader housing market heading into the second half of 2025. The Fed’s actions could potentially lead to a decrease in mortgage rates, making homeownership more affordable and potentially stimulating the housing market.

Why the Fed Bought Treasuries Quietly

According to market analysts, the Federal Reserve’s recent purchases appear designed to ease long-term borrowing costs without making a high-profile shift in monetary policy. Unlike traditional quantitative easing programs launched during the Great Recession and the COVID-19 pandemic, which were widely announced and explicitly aimed at economic support, this approach has been more muted.

The purchases likely serve multiple objectives:

Stabilizing bond markets amid global trade tensions and uneven economic indicators;
Nudging long-term interest rates lower without formally cutting the federal funds rate;
Maintaining the appearance of independence at a time of rising political scrutiny.

By buying long-term bonds, the Fed can influence the yields that determine fixed mortgage rates, including the widely watched 30-year loan.

Political Implications: Trump and Powell’s Unspoken Alignment

President Donald Trump has recently renewed public pressure on Fed Chair Jerome Powell, calling for rate cuts to boost housing affordability and economic momentum. Though Powell has not committed to any rate reduction, these Treasury purchases — whether coincidental or strategic — have the potential to ease financial conditions in a way that aligns with the administration’s goals.

While tensions between Trump and Powell have been well documented, their short-term interests now appear to overlap. Trump benefits from any economic stimulus that supports consumer confidence and home affordability; Powell, meanwhile, is attempting to engineer a soft landing without fueling inflation or appearing politically compromised.

Impact on Mortgage Rates and the Housing Market

So far, mortgage rates remain elevated. According to Bankrate.com, the average 30-year fixed mortgage rate sits at 6.89% — only slightly below its recent peak. Bond yields, which influence mortgage pricing, have not yet responded to the Treasury purchases in a meaningful way, likely due to offsetting factors such as inflation concerns and global capital shifts.

However, if the Fed continues similar purchases in the coming months, it could contribute to downward pressure on mortgage rates — a promising development for prospective homebuyers facing affordability challenges.

Phoenix–Scottsdale Housing Market: Signs of Caution

In markets like Phoenix and Scottsdale, where home prices soared during the pandemic years, the recent combination of high interest rates and broader economic caution has led to a notable slowdown in sales.

Inventory has increased, giving buyers more negotiating power.
Home prices have softened, with average values down from 2024 highs.
Transaction volume is lower, reflecting hesitation from both buyers and sellers.

If bond yields decline as a result of continued Fed intervention, mortgage rates could follow suit. This would reduce monthly payment burdens and potentially reignite buyer activity — particularly in rate-sensitive segments of the market, providing a sense of reassurance and confidence.

However, market uncertainty remains a defining factor. Consumer confidence has been dampened by global trade concerns, including the now-paused 145% tariff proposal on Chinese imports. Economic signals from the Fed suggest that any official rate cut would likely come later in 2025 — if at all.

Looking Ahead

For homebuyers, sellers, and real estate professionals across Arizona and the United States, the impact of the Fed’s actions will hinge on whether they successfully lower borrowing costs and stabilize confidence in the broader economy, providing a sense of security and stability.

For now, the housing market is closely watching the Fed and the bond market.

Grant Van Dyke