Trump pushes for 50-year mortgage! Secretly invites Wall Street giants to White House dinner to discuss livelihood crisis.

On October 12, Eastern Time, Trump, after the Republican Party's three major local election losses, unusually invited heavyweight figures from Wall Street, including JPMorgan Chase CEO Jamie Dimon and Blackstone founder Steve Schwarzman, to a closed-door dinner at the White House state dining room. The focus of this secret meeting was not on stock price pump or fall, but on whether American families could continue to afford mortgage and living expenses. Trump mentioned the 50-year mortgage plan during the dinner and candidly stated that in the past, economic information had “not resonated with the people's hearts.”

Trump Urgently Changes Messaging Strategy After Election Defeat

(Source: Bloomberg)

The Republican Party recently lost key seats in local elections in Virginia, New York, and New Jersey, and voter dissatisfaction with inflation and rising prices is evident. This dinner in the dazzling White House state dining room, attended by Trump, is essentially a political crisis response meeting. Accompanying the dinner are Treasury Secretary Scott Bessenet, who comes from a hedge fund background, and Commerce Secretary Howard Lutnick, who has experience on Wall Street.

Facing the burden of rising mortgage interest rates due to the recent increase in federal funding rates, Trump has called on senior officials to provide “immediate and feasible” solutions, hoping to alleviate public grievances in a short period. He candidly admitted during the banquet that in the past, the economic information conveyed “did not resonate with the public's heart,” and this rare self-reflection indicates the political pressure Trump is feeling. Therefore, he chose to break away from the previous practice of former President Biden keeping distance from financial elites, directly courting Wall Street to reshape the narrative of governance through the influence of the capital markets.

Trump told executives that any policy option could be renegotiated as long as it could reduce the burden on Americans, a sense of urgency that multiple financial professionals privately described as “campaign mode fully on.” This dinner was a rare opportunity for the financial sector to re-establish high-level communication channels with the government; for the White House, it was a declaration to prioritize “affordability” at the top of the national economic agenda, and just the day before, Trump had publicly mentioned the 50-year mortgage issue.

Opportunities and Risks of 50-Year Mortgage Plans

One of the core issues of the secret meeting is the 50-year mortgage plan proposed by Trump. Traditional American mortgage terms are usually 15 or 30 years, and a 50-year mortgage would significantly lower the monthly repayment amount, theoretically allowing more families to afford home purchases. For example, a $400,000 mortgage at a 6% interest rate would have a monthly repayment of about $2,398 for a 30-year term, but if extended to a 50-year term, the monthly repayment could be reduced to about $2,000, alleviating about 17% of the monthly payment pressure.

However, this plan has also sparked controversy. First, the total interest expenditure will increase significantly. For the same $400,000 mortgage, the total interest for a 30-year term is approximately $463,000, while for a 50-year term, the total interest will soar to about $800,000, nearly doubling the cost paid by the borrower in the end. Second, ultra-long mortgages may push housing prices to rise again, as lower monthly payment thresholds will release more purchasing power into the market, driving prices up in a situation of limited supply.

In addition, the impact of a 50-year mortgage on the financial system also needs to be assessed. Banks will have to bear credit risks and interest rate risks for a longer period, which may lead to tighter loan approval standards or require higher interest rate premiums. For young homebuyers, a 50-year mortgage means they may have to wait until their 70s to pay off the loan, which poses challenges for retirement planning and financial security.

Potential Impacts of a 50-Year Mortgage

Positive Effects: Reduce monthly repayment pressure, allowing more families to purchase homes and stimulate activity in the real estate market.

Negative Risks: Total interest expenses double, potentially driving up housing price bubbles and increasing long-term risks in the financial system.

Daimonti $1.5 trillion investment plan against inflation

Jamie Dimon of JPMorgan presented at a dinner about the bank's $1.5 trillion investment plan, targeting defense, energy, and manufacturing, emphasizing that “the flow of funds into the real economy is the long-term solution to curbing inflation.” This complements Trump's emphasis on supply chain repatriation policies. Dimon's argument is that the fundamental cause of inflation lies in supply shortages rather than excess demand, and therefore increasing investment to expand capacity is the fundamental solution.

This $1.5 trillion scale is extremely large. As one of the largest banks in the United States, JPMorgan's investment plan covers various forms such as direct investment, project financing, and credit support. The three key areas targeted are industries prioritized by the Trump administration. Defense investment aligns with Trump's policy of increasing military spending, energy investment focuses on the balanced development of traditional and new energy, and manufacturing investment is central to the supply chain returning to the United States.

Another executive has proposed relaxing leverage restrictions on hedge funds and banks, arguing that ample capital is necessary to accelerate corporate expansion. This suggestion for regulatory easing has been controversial since the financial crisis, with supporters believing that excessive regulation limits financial institutions' ability to support the real economy, while opponents worry about repeating the mistakes of the 2008 financial crisis.

Trump also asked those present to provide a white paper on the liquidity of the subprime mortgage market, tax relief for first-time homebuyers, and regulatory easing, and predicted that “as long as consensus is formed, an executive order can be signed quickly.” This strategy of bypassing Congress with executive orders is a hallmark of Trump's first term, showing his desire to rapidly push policies into place. After the dinner, some attendees followed Trump into the Oval Office to witness him signing the bill that ended the government shutdown, symbolizing the government's determination to maintain stability with the capital markets.

The Balancing Dilemma Between Livelihood and Capital

Trump's move is seen as a prelude to the policy tone of his second term: using public livelihood needs as a facade, with Wall Street resources as the backbone, achieving the dual expectations of voters and the market through deregulation and encouraging investment. However, the difficulty of balancing “making money cheaper” and “preventing financial risks” should not be underestimated.

If mortgage interest rate subsidies or tax deduction policies advance too quickly, it may drive housing prices to soar again, ultimately benefiting the wealthy class who already own properties, rather than first-time buyers. If regulatory easing is excessive, it will also raise concerns about systemic risk. The lessons from the 2008 financial crisis are still fresh in mind, as it was the overly relaxed mortgage standards and financial regulations that led to the subprime mortgage crisis.

For financial giants, deepening dialogue ensures that their interests are incorporated into policy design, which is why figures like Dimon and Schwarzman are willing to accept invitations to banquets. For ordinary families, the key lies in whether we can see actual declines in mortgage rates and wage increases keeping pace with prices in the coming quarters. Polls show that there is a significant gap between Americans' feelings about the economy and macroeconomic data; even though official inflation figures are declining, people still feel the ongoing pressure of food, energy, and housing costs.

It is certain that this dinner is just the prologue, and the interactions between the White House and Wall Street will become more frequent and more focused on the core question of “where the money should flow.” All sectors will continue to examine whether policies truly reach the goal of alleviating mortgage burdens and stabilizing prices, rather than once again creating a gap between capital and people's livelihoods.

Facing the pressure of mortgage loans and the shadow of inflation, the U.S. government and the financial sector are tied to the same rope. The White House dinner this time reveals an economic roadmap centered on affordability and driven by Wall Street investment. In the next four years, how to balance people's welfare and market vitality will be the most important indicator to test the success or failure of Trump's second term.