Are Folks In America That Stupid?' Dave Ramsey Says Americans Should Be More Suspicious Of The Fed Rate Cuts Timing

In a recent episode of The Ramsey Show, financial expert Dave Ramsey didn’t hold back when discussing the Federal Reserve’s latest rate cuts and timing – just weeks before a major election. Ramsey, known for his no-nonsense approach to personal finance, raised questions about the motives behind the Fed's decision, saying it's no coincidence that interest rates were lowered so close to Election Day.

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On Sept. 18, the Federal Reserve cut its interest rates by half a percentage point – the first cut since 2020. While some say this is a bold move to help a struggling national economy, Ramsey calls it bogus. 

Ramsey opened his discussion with a bold statement: “We just got word a few moments ago – surprise, surprise, 45 days from the election, the Fed dropped the interest rate … That wasn’t possible four months ago or eight months ago, but right before the election, it’s possible. That's just sus." 

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He criticized what he sees as the politically motivated nature of the timing, asking listeners, “Are you folks in America that stupid? That you don’t look at this and go, well, that’s suspicious timing?”

The timing of the rate cut is significant because economic issues have been a focal point in the current administration's challenges. Ramsey pointed out that it's really hard to keep a party in office when the economy is struggling during an election year and emphasized that the Fed rate cuts are just a political move. 

Ramsey believes the Fed’s decision to cut rates won't immediately impact the housing market, despite mortgage rates being at their lowest levels since early 2023. He also mentioned that the real estate market hasn’t experienced a boom despite these lower rates. Homeowners are reluctant to sell homes with 2-3% mortgage rates and upgrade to homes with significantly higher rates.

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Ramsey proposed an additional theory: “Some people might be waiting on the Harris administration or the Trump administration to fix their life and they're going to wait until after the election to decide whether they're gonna buy a house or not." Ramsey emphasized that waiting on political outcomes to change personal financial situations is misguided. 

George Kamel agreed, noting that while supply and demand in the housing market remain issues, some potential buyers have been holding off, waiting for rate cuts to make homes more affordable. 

Despite the hype, Ramsey warned that the Fed’s rate cut won't immediately impact mortgage rates, as those are influenced more by the bond market. “It’ll be postelection before you see any benefit from that. But it’s all about perception … This is a PR move.”

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Ramsey and Kamel concluded the discussion by pointing out that these kinds of announcements, like the Fed rate cut or the promises of student loan forgiveness, are often politically motivated. As Kamel put it, “It’s amazing the timing of that,” and Ramsey agreed, saying, “Pretty much like during the congressional elections, midterm stuff, Biden came out and said he’s gonna forgive all student loans. And everybody knew he couldn't do it.”

In the end, Ramsey's message to his audience was clear: don't let political timing cloud your judgment regarding personal finance.

If you are considering selling or purchasing a home, take the time to get informed about the economy and other factors that impact mortgage rates. Consider talking to a financial advisor to better understand your finances and how selling or purchasing a home at this time could impact your long-term goals. 

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