What Trump Tariffs Mean for Prices & Fed Cuts Rates, but Mortgages Are Up?
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Good morning, blue daily show. I your family and I tell me how today jero power cut interest strates for the second time this year.

So why are merger rates going up? It's friday, november eighth. Let's ride.

Good morning, and I hope you all have a Better friday than in combat political parties this year because they've seen a historic wave of defeat. Here's a while, said I saw in the financial times yesterday that would be entrained in the neels numbers hall of fame after the democrats loss on tuesday. Every governing party face in election this year, all ten from the U.

K. To france to japan to the united states, lost vote share. It's the first time this has ever happened, truly unprecedented.

And while there are absolutely local factors at play, the one thing every country experienced over the past couple of years was inflation. So voters appeared to have said, my life has gone way more expensive. People in charge, your fired.

I mean, that speaks to the viability of just framing yourself as an agent of change when you are going to the polls. And also the auditory where maybe the macro economic indicators were pretty positive for a lot of countries, but on a or individual level, people were feeling the pinch of of inflation. But my main take away here is i'm really not like in this statistic, am a chief san or I am a boss.

On cells expand because if the incubate are losing, that means IT could be a rough time. Those two power houses. Now, a word from our sponsor, yahoo finance. You know what? The best parts of yahoo finance is the perfect of information IT provides you.

When you open up at home page, you are greeted with all the headlines from the news that might affect your portfolio, but you also get quick snapshots of the market, like top gainers and losers from the day, top economic events that should be on your radar and how the international markets are doing.

IT is this corner copy of information, but not so overwhelming that you miss the important stuff. So really helpful too for what we do bringing this pot to you guys. And I think it'll be just as helpful for you in your daily routines.

But I don't take our word for IT. You can see IT for yourself by heading to yahoo finance com, go see a purple prince and action at yahoo finance dot com as if this week didn't bring enough hugely. Consequently, events the federal reserve cut interest strates yesterday.

IT was, as expected, a traditional quarter point decrease, which was smaller than the unusually large half point cut the fed announced september. By cutting rates again, the U. S.

Central bank is signaling is satisfied that inflation is coming back to Normal levels and is focus more on the job market. Lowering borrowing costs for consumers and businesses, which is what a red cut does, hopes to keep unemployment. It's currently low levels.

So two rate cuts in the books, but an algaas, a Christi level mystery about what lies ahead, the real election of Donald trump promises to massively shake up the path of the U. S. economy.

And so too the fed strategy, which must respond to those changes. For now, chair jane pal said he was too early to tell what trumps economic policies would mean for the fed because they haven't been implemented yet. At a press conference, power told reporters, we don't guess, we don't speculate, we don't assume about which campaign plans will be made into reality in the near term. He said. The election will have no .

effect on our policy decision. Yeah, financial playmakers try to view elections not as these big, uh, huge events, but more as just data points that allow them to feed into their decision making, but won't change IT. But we do have to talk about the relationship between trump in power, which actually stretches back to trust.

First term, trump appointed drone power, but then quickly turned on him as he wasn't doing exactly what he wanted, didn't lower interest strates quick enough as trump wanted at the time. Trump s has called him an enemy, criticised him in the past. What has frustrated trump about polls that he's pretty powerless over him? The president cannot on its on their own, bring down rates. The fed was granted independence from congress back in one thousand nine hundred fifty one so that central Bakers kind of do their thing and not have the influence of a politician telling them which we um to to conduct their rate cuts. And so that is why there is going to be this rocky relationship in the question of fed independence has been a big issue in this trump presidency.

Yeah, a reporter actually asked power yesterday whether he believed the president could remove him. And here's the clip. You believe the president has a power to fire or demote you? And has the fed determined the illegality of a president demoting at will? Any of the other governors with leadership positions not promoted under the law? Not what not .

permitted under the law. That was a mike drop .

IT was the actually .

the funniest note. I rarely do we see these moments from these fed press conferences. Ces, go vial. But that one, absolutely. When viral, the line between the White house and the fed could become blurry because trump has the opportunity appoint a fed chair in at twenty twenty six.

And if he does our strong power, which he is looking like that he might that line might be a little blurrier. He might put someone in there who he thinks he could have more control over. So power is saying right now that, no, I cannot be acted under the current law. He was very explosive about that. But potentially, when is terminated in six, then we could see a more lenient fed towards trumps.

Well, meanwhile, trumps policies are set to shake up the fed moves and its potential path forward for rake cuts, because trump economic policies, if they are implemented, are expected to raise inflation. The terrifying, the tax cuts, those are all going to stimulate demand, which could raise Prices.

In a recent report, the bank no mera forecasts inflation would be seventy five basis points higher in twenty twenty five under a trump presidency that could absolutely shake up the path of federal cuts. The the expectation is that under a tram presidency, there will be fewer rate cuts going forward because that would because when you lower rates, you stoke inflation essentially. And so if there's also going to be station stoke in the fed, might paul those rate cuts and and lower them at a more gradual pace's than .

they would otherwise, which is such a bother because right now, the fed preferred inflation member dropped to two point one percent last month that is just shy of the fed two all. So the central bank is trying to ease off the brakes that IT has been applying to the economy over once inflation hit that forty year high. So the road did just get a little bit bumpier ahead.

Maybe that the the rate cut kind of hate and said we are all expecting is going to be a little different. Moving on. So even though the federal fund rate is following would be homebuyers are not yet feeling the effects, the central bank alerted benchmark rate by twenty five points, as we just discuss, on top of its fifty point cut in september.

And yet the average ate on a thirty year fixed mortgage has gone up since that first cut. IT rose more than half a percent tax point to reach six point nine seven percent this week, according to data from fredy mac released yesterday. And IT might keep on climbing higher, thinks you a recent trump inspire rise in the ten year treasury yield.

Even though the fed has its scissors out and is beautifully cutting away to try to push down borrowing, Morgan rates are unfortunately outside its control. They are more heavily influenced treasury yields, which themselves are more influenced what the general outlook for the economy is and sense the economy looks like. IT will continue to be strong yields, and therefore mortgage rates remain painfully high for home buyers.

You'll throw a trump present cy into the mix where his tax and tax cuts are expected to reintroduce inflation and put even more pressure on the ten year. You have a recipe for gravity defying mortal rates. Yeah.

this is a shock to a lot of us because we thought I thought the fed cutting rates that supposed to bring down borrowing costs. The mortgage tes have been so high for so long, freezing over the housing market. And finally, there's going to be some relief.

People be able to refinance and get those mortgage down around five percent, and it's just gone in the complete opposite direction and at an extremely large magi ude as well. In the last five weeks, the rate has risen. The average thirty year uh fixed rate mortgage has rising sixty seven basis points, which is the largest increase in two years. And not only has the just state level are gone up, it's gone up in a big way and that is going to a continue to give problems to people who want to buy houses or refinance or move.

Thirty years of its mortgage were actually following following sense may so far a while looks like the uh the fed rate cuts were kind of filtering through the market. But then that train started reversing in early october, right around the time where prediction market is started. Dicing that trump was gonna a great a good chance of winning the election.

So we worsening a little bit relief, but then IT jumped right back up. Rates are up from right round four percent where they hovered for pretty much a decade going into the pandemic. Sixty seven basis point rise is been extremely painful in the last five weeks. IT was a total reversal from what you expected in what maybe the fed was hoping for?

Yeah, it's an interesting sign that the mortgage rates follow the ten year yield and not the fed rate cuts the feds federal funds rate, which the fed controls. That is a short term rate. The ten year the ten year yield is ten years is a long longer term view of the economy. And this is a sign that investors think that the economy is going to hit the gas peddle and cause a little more inflation on over the long term.

What one thing that you have to look at, two is if mortgage applications are falling or rising as well, because mortgage rates do filter down to if people are buying house or not, in mortgage applications have fAllen for six straight weeks now. So you call IT a frozen housing market. IT did rice over IT. We're feeling like another mini ice right now after IT looked like things were thwing for just a little bit yeah.

Home sales are on track for their worst year since nineteen ninety five. Since wednesday, we will talk a lot about how trump's reelection will impact the U. S.

economy. But unlike vegas, what happens in amErica doesn't stay in america. And his Victory will is already having massive consequences for the global economy. The top concern for other countries, both allies and fog, is trumps proposed tariffs.

He's pledged up to twenty percent terrorists on every single import coming into the united states and sixty percent from everything coming in from china, if enacted, and that's a big if, they would be the highest terrorist the U. S. Has had in one hundred years and fundamentally reshape global trade in a way we've never seen before.

Analysts are R, T, projecting a hit to other countries economies should the terabits get implemented, which is kind of the point the U. S, puts up trade barriers to protect domestic industries at the expense of foreign companies. Your products become more expensive in the market, are become more attractive, is the theory.

Two regions to watch our europe in china. Two of the U. S. Is largest trading partners. Eugh, exported one fifth of its total goods to amErica last year, while china exported five hundred billion dollars and goods to the U. S about fifteen percent of the value of all of its exports to be the next four years could be one of dramatic upheaval for the world economic order.

One thing to think about two is our tears s going to be this real thing that are actually lied to blanket across europe, across china, across mexico. Or is IT onna be more of a bargaining tool? Because member, right now, the U.

S. Economy is a heck of a bargaining tool. IT is the only place in the world right now, especially among g seven peers, that is growing at at a sizable rate right now.

So if you are confront with the possibility of maybe losing access to part the U. S. Economy, that is a huge bargaining tool because of just how big of a growth engine we are right now. So think of tears in two ways. One, they could actually happen, or they might just be something that are brought to the table .

as a bargaining ship, right? So let's run down maybe some countries and regions to talk about whether they are a winner or a lude potential loser in the new world order to these terms. S uh, come to, uh, fruition.

An started germany. Germany is seen as a loser, uh, in this new paradise. I mean, cars are germany single largest export. The us. Is the country's the largest export market.

So if they're tariff s on cars, and we know german other makers are already fell in the pinch, they're already hurting votes wagon is set to close factories in germany for the first time. So that seems germany and europe in general could could take IT an absolute hit if these terrifying come to pass goldman sex. Already after the election, golden sex was very quick to downgrade its GDP projection for all the twenty countries that use the euro. They're saying it's going to expand at point eight percent next year, which was down from one point one percent forecasts previously.

Yeah, trump has come out and railed against the E. U. One hundred and fifty eight billion euro trade surplus with the us. He saying, and especially last out of germany, like you said, for selling eight cars were not buying any in return. And then another thing that could make europe loser is that they could suffered this kind of added burden of increased the fense cost if trump kind of reduce the for nata, which is another thing that he has said.

he he do and and then another country that absolutely in the cross hairs is china. China was hit with the bulk of tariff s storing trumps last term. IT was caught a little bit flat footed, but right now, the chinese economy is hurting.

The only area that is booming or growing for them is those exports is making you all of these goods, especially clean energy products, in its factories and shipping them abroad. The domestic consumption, people buying stuff in there is down. So china will likely have to flood its economy with stimulus if these terrify happen and the art is doing that. I mean, just overnight, I woke up to the headline that china announced a one point four trillion dollar program to refinance local government debt, which is a huge stimulus in preparation for some of the economic pain that might happen in a represent cy.

we would see a bit of a reshuffling, two of where chinese goods are ending up. You probably would see more of them end up in europe actually, because if terriers are applied to china, than less are going towards united states. Another potential winner from that reshuffling is brazil, because brazil art has seen greater trade with china.

If you go back to the first trump administration, we saw that china replace all of its U. S. Soybean imports with brazilian soybean imports.

So that is something that will happen. Like this is a puzzle piece. Global trade is global.

So there are places that if U. S. Isn't train with you anymore, maybe you go to brazil or maxo or another place. So it's not just a blanket winners and losers. There will be just kind of a reordering of the world economy up next IT is stock the week, dock the week time. It's almost time .

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on besides great snacks in the breakroom?

It's got to the innovation, exactly. And innovation relies on business processes that are clear and .

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IT is stock of the week dock the week time where new. And I pick one stock from the week's news that probably reset their own clocks for daylight saving time in one stock that is just waiting for next year for them to be correct. Again, I won the precious game of who can run a marathon faster.

So I am up or just run a marathon period.

A faster period is faster and I stock the week. Is private prison companies sifting through some of the market reactions? There were plenty of winners in the best post election stock out we've seen in decades, but today was hearing in on private prison socks, which got a huge boost in the wake of trump s win.

Geo group, a real estate investment trust that specializes in the ownership and management of correctional facilities, is up over fifty percent this week, and 2 civic， one of the largest private prison Operators, is also up nearly sixty percent. Why the big jumps? Well, a trump presidency is likely to increase border security and detained more migrants crossing into the country illegally, which would lead to a jump in demand for detention facilities.

Plus, a republican controlled congress is likely to push for more funding for immigration and customs enforcement to tension centers, learn the more opportunities for a company like G. O. And core civic. I would imagine a lot of people don't think about this industry much, but IT does stand to benefit from trumps immigration policies.

Yeah, one of his core promises on the campaign, tra, one that we could enact from day one, is the largest deportation in american history. There are thirteen million immigrants in the U. S. Illegally, and deporting them would be logistically very and cost a lot of money. So if there is more of a budget set aside for doing this, which trump in the republican congress would likely do, that is going to flow to these places that have detention centers. And the american immigration council said that the cost of deporting these immigrants over a little more than decade would cost nearly one trillion dollars.

And so much of that money is flowing into the private sector because G, O to this presentation that said, private companies provide ninety percent of the beds for ice processing. G O itself provides forty two percent of those private sector beds. So this is defining a boon for the private prison sectors, not government Operative facilities. They do rely on these private readers.

You know, I got to admit, wasn't easy to find a dog this week. I can see why you foisted IT on me. I was interest incredible week for the stock market, but I think I found a group of companies that didn't go up and to the right, like everyone else, retailers like american ego cross and five below who shares all fell modestly this week.

And that's because of the threat of tariff. There's that word again, american is that import their goods from china are expected to take a big hit from those terrifying because they're going to be the ones paying for them. So the choice is either eat those higher costs, intend your profits or pass along those costs to the consumer.

And given those options, they're probably going to hike Prices. And a study on trump's rrh released earlier this week, the national retail federation projected that they'd lead to dramatic double digit percentage Price increases in almost all six of the real categories the group analyzes, which is a pair of footwear, furniture, household appliances, travel goods and toys. Higher Prices means shoppers already fed up with inflation are gonna stay home. The N. R, F estimated that americans would lose up to seventy eight billion dollars in annual spending power due to the terrace.

Yeah, it's going to hurt consumers. Gonna hurt retailers. And then another thing I was looking at, at just the downstream effects is how are shipping companies and and trucking companies actually fearing as well? Because a lot of retailers are front loading their imports right now.

So you actually did see a jump in trucking stocks, domestic trucking socks like jb hand snyder national, they were in a rally mode on wednesday. One part of the of the supply chain that we saw falling this week was ocean Carriers. May guy kind of had this big slump because a lot of people think that these terriers are going to kind of clog up the global supply, a chain roots. So IT was interesting to see how domestic trucking companies were doing well because a lot of these importers are a lot of these retailers are importing lot of goods. But on a wider scale, these simply companies looks like they're feeling a little bit of pinched as are .

are gonna feel some pinched going forward with even within the retail industry, there are going to be winners and losers. Some of retailers have gone through this before. There were. Tariff s on chinese goods that are still in place that were implemented by trump in twenty eighteen. And what they did was what we talked about earlier in the show was they reshuffled supply chains away from china.

So Steve main, yesterday the fashion said that I was moving forty five percent of its production out of china to other countries in anticipation for these terf s so if you are a company that is highly exposed to china, and that is why I called out five below cross sketchers american eagle, that's what bank of america's highlighted. Those as particular retailers that have especially high risk because they are exposed to china compared to other retailers that have less of an exposure to china, then you're going to start see some winners and losers. And there's also the question of scale.

Walmart and amazon are probably gonna be OK because they can eat those profits. They are big enough to hit to accept that profit hit whether a smaller retailer might not be able to have to pass along those costs to consumers, raise Prices. People buy less me. They go back to walmart in the amazon so I could lead to a you rich getting richer kind of situation yeah.

Analysts have said that companies do try to employ these ranges of strategies to try to mitigate the effects of these import taxes. Will unfortunately, the general consensus was that there are no great, terrible mitigation strategy. The chAllenge is, is to find one that is least bad. So I think that is kind of the approach a lot of these companies are .

taking to these potential. To think about a dollar store, uh, stocks yesterday, dollar tree, dollar general, you sell something that your whole value proposition that you sell something for a though I think it's a dollar twenty five ah now and you just you can't raise Prices. So your business in your profitable is going to get a hit from terrace or let's spring to the finish this friday with a sweep of some more headlines.

Have you ever taken medicine to help out with your cold and found IT doesn't work? well? Turns out that actually doesn't work.

Yesterday, the F, D, A proposed removing a common and and in over the counter cold medicines after a review found IT was not effective. The ingredient for left on has long been a staple ingredient of products like thailand, al muslim x and ventral. But when taken in liquid or pill form, IT doesn't do anything for nasal congestion.

Yeah, this is making people who constantly have a stuff, you know, I feel very justified right now. So the history of final difference is very interesting, because I got after approval back in the one thousand nine seventy. But IT really jumped in popularity in two thousand and five because this legislation moved a similar d congestion suda feed drine, which in large candidate, if you've seen breaking bad, people know that I can make method to means that was removed from shells.

So then all the sudden, final was kind of thrust in the spotlight, even though for a long time, scientists have kind of said, I would not really sure if this works IT now looks like finally if the I got its duck in a row um and so yeah if you if you knows there's been stuffing and isn't going away now you know why ChatGPT might be dropping the GPT soon OpenAI found her sam altman tweed out. A link this week that simply reads chat dot com that redirects to its company's chat pot. Chat c.

Chat dot com is actually one of the oldest domains on the internet, registered all the way back in one thousand and ninety six. This is also one of the most expensive hope spots cofounder shout help spot for responding. My marathon actually acquired chat dot com for fifteen and a half million dollars last year, making IT one of the top two publicly reported domain sales of all time. And he confirmed that he sold IT to OpenAI earlier this year for a Price greater than that. Do we think spending over fifty million dollars on the domain is worth IT?

Well, let's remember that OpenAI just rays six point six billion dollars. I can do the math, my head, but fifteen million dollars out of six point billion is probably not going to a register on the baLance sheet but they don't even pay cash IT seems uh, the a hub spot guy said that they gave over shares equity in the company and in exchange for uh chat a com h instead of actually just writing a check for IT. So I don't know, would you would you rather have fifty million dollars in the bank or fifty million dollars of equity in OpenAI equity .

and opening eye, for sure, I would not spend either of that the equity or the million on chat 点 com， though I don't know. ChatGPT 点 com is a planning find domain name。 Yesterday.

police urge residents of yemassee, south CarOlina, to lock their doors and windows after dozens of monkeys escape from a medical facility. Wednesday, forty three rises. Macaca monkeys escape from the facility run by the company alpha genesis, when a new employee failed to fully shut an enclosure.

When one bolted out the door, the others followed, followed the leader's style, the police chief said. The monkeys, all Young females, did not pose any danger or health risks. And that employees, quote, have eyes on the primates and are working to entice them with food that work on me.

What work? Authorities have set up these traps. They're using thermal energy imaging to try to locate these monkeys.

I think this is the start to plan of the apps, at least the James franco verga alph a genesis also is not the first sign this has happened to them. Similar incidents have occurred back in twenty twenty four, in twenty sixteen. These monkeys are just extremely smart, extremely able to escape.

And so now we got a lot of them run around south CarOlina. Ina breaking news, Rachel gun, A K, A ray gun, A, K, A, the australian break dancer who dance so badly in the olympics that he instantly turned into a mean, has retired from breaking the scrutiny in backlash received after her unique routine win viral ultimately made IT difficult. Her to approach future battles, leading to a decision to hang up her track suit and retire from competing. Neil, a bit of a sad ending for regan to go out like this.

IT was, but he was a start long enough to become a halloween costume. I saw a lot of regan s out there, so you can always hang your hat on that. Well, that is a wrap on her shoes for the week.

What a week I was. Thanks, as always, for starting your mornings with us. Have a great friday and an even Better weekend for any questions, comments or feedback, send an email to morning blue daily at morning blue outcome. And if this podcast has helped you get a Better understanding of the election results this week, don't yourself share IT with a friend, family member or co worker who could also benefit. You're drawing a blank on that toys here with his daily recommendation.

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Olivia gram is our associates producer. You chat A O go is our technical director. Billion is an audio. Her makeup is coming out of retirement. G on our David, amy is our chief content officer, and our show is the production .

of boring room. Great day. knew. I wish you all well.