Soda, Motorcycle Prices Rise as Tariffs Hit Home for Consumers - ABI

Consumers are starting to see higher prices for recreational vehicles, soda, beer and other goods that now cost more to make as a result of recent tariffs on metals and parts, the Wall Street Journal reported. Many manufacturers in recent days, including Coca-Cola Co. and Polaris Industries Inc., have said that they plan to raise prices. U.S. steel and aluminum prices are up 33 percent and 11 percent, respectively, since the start of the year, as producers and their customers begin to price in the tariffs that the Trump administration first applied on foreign-made metal in March. Tariffs on a host of additional imported products from China this month have added costs for companies that use those components to assemble their products in the U.S.

Record Drop in Foreigners Buying U.S. Homes - ABI

Foreign purchases of U.S. homes had their biggest drop ever, bringing relief to waves of American house hunters who have struggled to compete in affluent neighborhoods with wealthy buyers from abroad, The Wall Street Journal reported. Purchases by international buyers totaled $121 billion in the fiscal year ended in March, down from $153 billion the previous year, according to a survey released Thursday. That 21 percent decline was the largest on record. The drop in foreign interest helps well-heeled buyers in places like Manhattan, Seattle, San Francisco, Miami, and Orange County, Calif. While foreigners make up a small share of the overall U.S. housing market, they are concentrated near the high end of the market and are more likely to pay in cash and bid above the asking price, which has challenged local buyers to come up with larger down payments and pay more. The sharp decline in purchases reflected higher home prices, a strengthening dollar and intensifying political tensions between the U.S. and other parts of the world, economists say. The pullback creates an additional challenge for many sellers, who have welcomed foreign interest and the ease of all-cash deals. The housing market is already slowing, especially for developers of higher-end condos, some of whom heavily marketed their units to foreign investors.

Housing Market Is Showing Signs of Cracking: ‘Anything-Goes List-Price Strategy Is No Longer Working

Sales of both existing and newly built homes fell in June, the latter to the lowest level since last year, CNBC reported. Prices continue to rise, but the gains are slowing. Mortgage applications to purchase both new and existing homes have been falling steadily, and mortgage rates are rising again. Single-family home construction also fell and was lower than June 2017. In one of the nation's hottest metropolitan markets, Denver, home sales fell 5.5 percent annually in June, even as prices hit an all-time high. Realtors there blame it squarely on a lack of homes for sale. "Year-over-year prices have been climbing for more than two years now, which is great news for homeowners and sellers," said RE/MAX CEO Adam Contos. "The slower sales figures we're seeing are tied to inventory more than anything else." But the slowdown is also tied to overheated prices. Even in the hottest markets, there is a limit to affordability, and that limit is clearly now being hit. In Southern California, sales of both new and existing homes fell sharply in June compared with a year ago. Demand is still quite strong, and while prices continue to gain, more listings are showing price reductions.

Wall Street Investors Can’t Remember the Last Time a GDP Report Was So Crucial - ABI

Wall Street just traversed a gauntlet: the busiest week of corporate quarterly results, fresh developments in global trade relations and a historic stock tumble by Facebook Inc., MarketWatch reported. However, the headliner of this jam-packed week might be the release of the GDP, the official scorecard of the U.S. economy. As one fixed-income strategist put it, never has a reading of gross domestic product held so much significance, with the three main equity benchmarks — the Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite Index — as well as the U.S. dollar and Treasury markets primed for Friday’s highly anticipated print. Here’s how Guy LeBas, head of fixed-income strategy for Janney Montgomery Scott, put it via Twitter on Thursday: “I can’t remember the last time the markets placed such importance on a #GDP number as they have with tomorrow. Given the perceived optimism, a miss could catch rates violently offside (i.e., rally risk),” he wrote. What’s all the fuss about? Second-quarter GDP data might reflect one of the fastest rates of economic expansion since a 5.2 percent print in the third quarter of 2014, and if it comes out ahead of that figure, it would be the best GDP report since 2003. Growing buzz around the possibility of such a strong read comes as the White House has been suggesting that the number from the Commerce Department will be huge.

Trump Administration Moves to Make It Harder for Defrauded Students to Erase Debt - ABI

Education Secretary Betsy DeVos moved Wednesday to make it harder for students who say they were defrauded by colleges to erase their debts, rolling back Obama-era regulations that for-profit colleges saw as threatening their survival, The Washington Post reported. The proposed rules published Wednesday require students to prove that schools knowingly deceived them if they want their federal loans canceled. And it scuttled an Obama administration provision that allowed similar claims to be processed as a group. Instead, students will have to prove their claims individually. The rules are DeVos’ rewrite of an Obama-era regulation published in 2016 and part of that administration’s crackdown on for-profit colleges that critics say prey on vulnerable students. In ways big and small, the new version makes it harder for students to win debt forgiveness. The department aims to publish a final rule by Nov. 1 so that it can take effect for loans originating after July 1, 2019. The agency will allow 30 days for public comments on the proposal.

Fifth Circuit Court of Appeals Confirms Decision to Strike Down DOL’s Fiduciary Rule - ABI

After a long delay, the U.S. Fifth Circuit Court of Appeals confirmed on Thursday a March decision to strike down the Labor Department's fiduciary rule, Investment News reported. The court issued a mandate making effective the March 15 split decision that vacated the DOL regulation. The court majority held that the agency exceeded its authority in promulgating the rule, which would have required brokers to act in the best interests of their clients in retirement accounts. In the mandate, the court also said that the Labor Department has to pay the financial industry plaintiffs the costs related to the appeal. The 5th Circuit overturned a decision by a Dallas federal court that had upheld the DOL rule, representing the first win by industry opponents in several lawsuits that were filed against the measure. The mandate was supposed to have been filed May 7. It was delayed for several weeks, as AARP and three states tried to intervene in the case to defend the rule after the Department of Justice, acting on behalf of the DOL, declined to appeal the March 15 decision.

White House Proposes Re-Privatizing Mortgage Giants Fannie, Freddie - ABI

The White House proposed on Thursday to move Fannie Mae and Freddie Mac out of government custody and back into the private sector, the most comprehensive statement of the administration’s preferences on housing finance reform yet, the Washington Examiner reported. The proposal, included in a broader government overhaul plan, would resemble draft legislation authored by Sen. Bob Corker (R-Tenn.) meant to attract bipartisan support. It would require Congress to act, suggesting that the Trump administration doesn’t intend to pursue a major administrative overhaul of the two-bailed out mortgage giants. It calls for allowing Fannie and Freddie to enter the private sector after being in government conservatorship since 2008. Then, they — and their competitors that might enter the market — would be given an explicit government guarantee on mortgage-backed securities that they issue.

Trump Officials Announce $12 Billion Bailout Plan for Farmers - ABI

The administration announced a $12 billion bailout plan for farmers hurt by “unjustified retaliatory tariffs” in President Trump’s trade wars, while some GOP lawmakers and farmers recoiled at the government aid and urged the president to seek a negotiated peace with U.S. trading partners, The Washington Times reported. The plan will pay direct assistance to Midwest soybean producers and others targeted by retaliatory tariffs, including hog farmers and corn growers. The government’s purchases of excess crops would not require congressional approval and would come through the Commodity Credit Corporation, a wing of the Agriculture Department. “This is a short-term solution that will give President Trump and his administration the time to work on long-term trade deals,” said Agriculture Secretary Sonny Perdue. “We’re making tremendous progress. And the farmers will be the biggest beneficiary," President Trump said. "Watch. Just be a little patient. These countries have been ripping us off for decades. It doesn’t take a week, it takes a little longer. Stick with us.” The president is scheduled to host EU President Jean-Claude Juncker at the White House on Wednesday, with a discussion on trade high on the agenda. President Trump has imposed tariffs on imported EU steel and aluminum, and has threatened new levies on cars. “This trade war is cutting the legs out from under farmers, and White House’s ‘plan’ is to spend $12 billion on gold crutches,” said Sen. Ben Sasse (R-Neb.). “America’s farmers don’t want to be paid to lose — they want to win by feeding the world. This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.”

Consumer Bureau Nominee Could Face ‘Bumpy Ride’ Over Lack of Experience - ABI

When the White House named Kathleen Kraninger in June to be the next director of a post-crisis consumer watchdog, many of the agency’s fiercest critics and its most ardent supporters had the same response were not sure who she was. After years of working as a career bureaucrat and congressional staff member, she will take a seat in the spotlight when senators from both parties examine her credentials to lead the Consumer Financial Protection Bureau, the New York Times reported. While Kraninger, an official at the Office of Management and Budget, is expected to take a much more business-friendly approach to consumer protection than many Democrats would like, her nomination presents something of a Hobson’s choice. Scuttling her confirmation would extend the tenure of Mick Mulvaney, the agency’s acting director and the head of the budget office, who has tried to cripple the consumer bureau by freezing enforcement activity, calling for deep budget cuts and halting new investigations. Critics say Kraninger is likely to pursue a similar path as Mulvaney, with whom she has worked closely at the White House budget office, where she serves as associate director for general government. In her current role, Kraninger oversees the budgets for a wide swath of government agencies, including the Treasury Department, the Department of Homeland Security and the Department of Housing and Urban Development.

Americans Paid Over $100 Billion In Credit-Card Interest In 2017 - ABI

Americans paid banks some $104 billion in credit-card interest and fees in the last year, up 11% on the year and 35% over the last five years, according to the personal-finance website MagnifyMoney, which analyzed data from the Federal Deposit Insurance Corporation (FDIC) through March 2018. The bad news: That number will likely only rise this year. The Federal Reserve has forecast four interest rate hikes (one every three months) in 2018. The Fed has increased interest rates twice this year to between 1.75% and 2% and has penciled in two more quarter-point moves. When the Fed raises rates, which it in June, credit-card debt gets more expensive, because banks often pass on those higher rates to customers. Consumers with credit-card debt will likely pay an additional $2.2 billion this year in interest payments because of the last rate hike, the credit-card website CompareCards found. If the Fed raises rates a total of four times this year, it will create a total of $110 billion for Americans to pay in credit-card interest and fees, MagnifyMoney found. Collectively, that’s a huge amount, said Nick Clements, co-founder of MagnifyMoney. But people making payments on their credit cards are less likely to notice than those who make mortgage payments. “Most people will only see their minimum due increase by a couple of dollars,” he said. “It’s not dramatic.”