Pro Talks: Wilmington Trust CIO Tony Roth on the risks lurking in the bond market
Tony Roth, chief investment officer at Wilmington Trust, speaks with CNBC's Jeff Cox about the current state of play in the financial markets and the economy, with Tony emphasizing the importance of non-U.S. assets amid a time of elevated uncertainty over trade policy and the Fed's approach to interest rates. Along the way, he also fields questions from CNBC Pro subscribers.
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Miami Herald
28 minutes ago
- Miami Herald
Top housing official sends Fed Chair Powell blunt message on mortgage rates
American homeowners and aspiring homebuyers are exhausted by mortgage rates that are the highest in this century. With 30-year fixed mortgages at 6.77% on June 26, the housing industry is stagnant: no buyers, no sellers, and – an important economic indicator – lagging new construction. Don't miss the move: Subscribe to TheStreet's free daily newsletter U.S. Housing FHFA Director William J. Pulte, echoing his boss President Donald Trump, puts the blame squarely on Federal Reserve Chairman Jerome Powell. Related: Fed chair sends strong message on tariffs to Senate panel Pulte ratcheted up criticism of Powell this week, first calling for his resignation and then delivering a powerful personal rebuke on June 27. Image source: Bloomberg/Getty Images Pulte, also the head of Fannie Mae, is the grandson of the founder of the mega homebuilder PulteGroup and formerly served on PulteGroup's board of directors. The U.S. housing market is especially brutal right now for first-time homebuyers, who can barely afford down payments, since supply shortages have propped up home prices. The median price for a new home exceeded $407,000 in April, up from $310,000 in 2020. The average mortgage payment also doubled to $2,207 in 2024, according to Bankrate, leaving first-time buyers struggling to keep up. Related: Fannie Mae chief Pulte sends savage one-word message to Fed's Powell Privately-owned housing starts in May were at a seasonally adjusted rate of 1,256,000. This is 9.8% below the revised April estimate. The Northeast, South, and Midwest saw declines, while the West saw an increase. The Fed's dual mandate is to prudently monitor monetary policy to maintain inflation (at about 2%) and keep unemployment relatively low to ensure the recession-free economy and its GDP are humming along. It's a delicate balance. The Federal Open Meeting Committee controls the Federal Funds Rate, which banks charge each other overnight to borrow money. At the June meeting, the funds rate stayed at 4.25% to 4.50%. The last funds rate cut was in December 2024. The funds rate is tied to the cost of borrowing money for consumers, investors, and businesses. Related: Fed official predicts when to expect interest rate cuts Mortgage rates typically run 2% to 3% higher than the 10-year Treasury note yield, and the Fed Funds Rate highly influences the 10-year yield. As a result, 30-year mortgage rates have risen to roughly 6.8% from 2.7% in early 2021. The average mortgage payment also doubled to $2,207 between 2020 and 2024. At the time of the June Fed meeting, Powell said the post-pandemic economy was resilient and stable, but the risk of tariff inflation on prices on the nation's supply chain prompted a "wait-and-see" approach to holding rates steady. He repeated those assertions to both the House and Senate panels this week, adding that the expected inflation from the tariffs would likely bubble up into economic indicators for June and July. If interest rates drop, so will mortgage rates, Pulte said in a June 27 CNBC interview. Powell "can hallucinate about what tariffs can do,'' but he's wrong, Pulte said. "That's why we need the 'Fake High Priest of the Fed'...to lower rates,'' Pulte said. More Federal Reserve: Fed interest rate cut decision resets forecasts for the rest of this yearFederal Reserve prepares strong message on long-term interest ratesFed official revamps interest-rate cut forecast for this year Large, medium, and small construction companies are all hurting from the housing crisis, Pulte said. Publicly traded builders are not immune, he added. "The American people are sick and tired,'' said Pulte, who earlier called for Powell to resign. President Trump's proposed tariffs – essentially an external sales tax to U.S. trading partners that we pay one way or another – face a July 9 deadline. The president, during a press conference in the White House Briefing Room on June 27, re-hashed his displeasure over high interest rates, calling Powell "just not a very smart person." The next Fed meeting is July 29-30. Both Fed and market watchers had forecast the next probable rate cut could appear at the central bank's September FOMC meeting. Related: Fed official makes surprising interest rate cut prediction The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
CNBC
2 hours ago
- CNBC
Here's how China just proved it can shut down auto production around the world
China dominates the world's production and processing of rare earth elements, which are used in all kinds of things: sports equipment, national defense, and each of the roughly 16 million cars sold in the US every year. The Asian country suddenly restricted exports in early April 2025. The move sent shockwaves through the auto industry which can't build cars without these minerals. CNBC Dove in to see how we got here, and how the auto industry might find its way out.
Yahoo
3 hours ago
- Yahoo
Charting the Global Economy: Consumer Spending Weakens in US
(Bloomberg) -- US consumers are growing tired, according to fresh data that showed cutbacks in spending on big-ticket goods and services, extending a first-quarter demand slowdown. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares US Renters Face Storm of Rising Costs Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Sprawl Is Still Not the Answer Mapping the Architectural History of New York's Chinatown Inflation-adjusted consumer spending dropped last month by the most since January. Americans also stepped back from the housing market as new-home sales slid by the most in three years. At the same time, Federal Reserve policymakers indicated they're in little rush to lower interest rates. In the euro area, business activity barely grew amid lingering uncertainty related to US tariffs and geopolitics. Meantime, profits at Chinese industrial firms sagged as the country battles deflationary forces. Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics: US Consumer spending declined in May by the most since the start of the year, indicating elevated uncertainty around the Trump administration's economic policies is increasingly weighing on the outlook for growth. The latest figures suggest sluggish household demand, especially for services, extended into May after the weakest quarter for personal consumption since the onset of the pandemic. A flurry of Federal Reserve officials this week made clear they'll need a few more months to gain confidence that tariff-driven price hikes won't raise inflation in a persistent way. Fed Governors Christopher Waller and Michelle Bowman captured attention in the past week when they signaled they'd be open to lowering rates as soon as the Fed's July 29-30 meeting if inflation remains contained. New-home sales fell 13.7% in May, the most in almost three years, as rampant incentives from builders fell short of alleviating affordability constraints. The latest results show homebuilders are sitting on rising inventories amid mounting economic challenges, including mortgage rates stuck near 7%, higher materials costs due to tariffs and a slowing labor market. Europe German companies are the most upbeat about the economy in more than two years as an imminent boost to public spending outweighs concerns over US tariffs and wars in the Middle East and Ukraine. The euro area's private sector barely grew in June, remaining in limbo as erratic US trade policy and geopolitical conflicts leave companies in the dark on what's next. Surging grocery bills are threatening to slow the pace of the Bank of England's interest-rate cuts by raising the risk that inflation will stay elevated even as the UK economy shows signs of sputtering. The prices of staples including butter, beef and chocolate in May were up nearly 20% from a year earlier, contributing to the biggest annual jump in overall food prices since February 2024. Asia China's industrial firms saw their profits drop the most since October, illustrating weakness in an economy strained by higher US tariffs and lingering deflationary pressure. Industrial profits fell 9.1% in May from a year earlier. The deterioration bodes ill for business confidence and could make companies more reluctant to invest and hire. Apartment rents in Tokyo are rising at the fastest pace in 30 years in the latest sign for the Bank of Japan that the nation's inflation trend is spreading deeper through the economy. Rents in the capital climbed 1.3% from a year earlier in April and May for the largest gains since 1994, according to the Ministry of Internal Affairs. Emerging Markets Mexico's central bank again cut its benchmark interest rate by half a percentage point but it opened the door to smaller cuts going forward as policymakers worry the economy will continue to suffer headwinds after barely avoiding tipping into recession earlier this year. World In addition to Mexico's policy decision, central bankers in Paraguay, Morocco, Hungary, Thailand, Czech Republic, Guatemala, and Colombia all kept interest rates unchanged. --With assistance from Irina Anghel, Matthew Boesler, John Liu, Catarina Saraiva, Michael Sasso, Zoe Schneeweiss, Mark Schroers, Fran Wang, Alexander Weber and Erica Yokoyama. America's Top Consumer-Sentiment Economist Is Worried How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 ©2025 Bloomberg L.P.
