Safety regulators call for investigation into Shein, Temu
Shein and Temu icons are seen displayed on a phone screen in this illustration photo taken in Krakow, Poland on August 27, 2024. (Jakub Porzycki/NurPhoto via Getty Images)
(NEW YORK) — Federal safety regulators are calling for an investigation into popular Chinese e-commerce websites Shein and Temu over concerns shoppers can easily purchase baby and toddler products that do not meet U.S. safety regulations.
In a joint letter Monday, Consumer Product Safety Commission Commissioners Peter A. Feldman and Douglas Dziak cited “recent media reports that deadly baby and toddler products are easy to find on these platforms.”
The letter did not single out specific products, but one report from business technology publication The Information, cited in the CPSC letter, found that padded crib bumpers, which were banned by Congress in 2022, are still available on the retailer websites.
Temu said in a statement to ABC News that it requires all sellers “to comply with applicable laws and regulations, including those related to product safety.”
“Our interests are aligned with the U.S. Consumer Product Safety Commission (CPSC) in ensuring consumer protection and product safety, and we will cooperate fully with any investigation,” a Temu spokesperson said.
A Shein spokesperson also told ABC News that the company prioritizes customer safety.
“At SHEIN, customer safety is our top priority and we are investing millions of dollars to strengthen our compliance programs,” Shein said in a statement. “In the last year SHEIN has spent over $10 million building a strong global compliance function and developing partnerships with internationally renowned testing agencies such as Intertek, SGS, BV, and TUV, to further enhance our safety practices. Earlier this year it was also announced that an additional $50 million dollars will be dedicated to fortifying our Global Compliance Center and initiatives to ensure strict adherence to our rigorous product safety standards and full compliance with applicable laws and regulations.”
The spokesperson added, “Our global team, including more than 1,000 U.S. employees, remains steadfast in its commitment to quality and safety for our customers, and we resolutely support the Commission’s mandate.”
Both Temu and Shein have exploded in popularity in the U.S., in part because their sites offer cheap prices on a variety of products from clothes to home goods.
The CPSC commissioners said e-commerce platforms can offer great deals to consumers, but it’s critical they comply with U.S. safety standards to avoid any risk of injury.
(NEW YORK) — After once deriding cryptocurrency as a “scam,” former President Donald Trump on Monday formally threw his support behind World Liberty Financial, a crypto venture whose business model remains largely unclear but has already drawn scrutiny as a potential ethics headache for his administration if he returns to the White House in January.
Joined Monday by his two adult sons and others involved in the fledgling business, including billionaire donor Steve Witkoff, Trump declared in a livestream on X that “crypto is one of those things we have to do,” and suggested that he would work to limit regulation of the industry if elected.
“Right now, you have a very hostile [Security and Exchange Commission] … they’ve been very hostile toward crypto,” Trump said. “My attitude is different.”
Details about the venture, including Trump’s role and potential compensation, remain unclear. The company’s website, which bears an image of a backlit Trump speaking at a podium, suggests the platform will have its own crypto token, called $WL, and aspires to “empower our users to operate their finances … with no direct oversight of any government agencies or officials.”
Industry experts said the website provides few details about the company — including what it will offer, who will have access to its profits, and how the Trump family stands to make money from it. James Butterfill, the head of research at CoinShares, a digital asset management firm, told ABC News that the website contains little more than “buzzwords.”
Government ethics watchdogs consulted by ABC News were quick to point out potential conflicts of interest posed by a candidate for president launching or becoming otherwise involved with a new business within weeks of Election Day — particularly in an industry as polarizing and unregulated as crypto, in which users directly exchange digital currencies without the oversight of banks or the government.
Jordan Libowitz, a spokesperson for Citizens for Responsibility and Ethics in Washington, or CREW, said a future Trump administration would have wide latitude to impact crypto policy — and Trump’s own personal stake in the industry could potentially rub up against the best interests of the country.
“We’re still in the Wild West with crypto. It’s clear there is going to be some kind of regulation, but to what extent and how friendly they are to the industry, we don’t yet know,” Libowitz said. “The president obviously appoints the people in charge of that.”
Steven Cheung, a spokesperson for the Trump campaign, rejected any suggestion that Trump’s role in World Liberty Financial could pose an ethical dilemma if he’s reelected, calling Trump “the most ethical president in American history.”
“When President Trump first ran for office, he stepped away from his very successful and lucrative businesses because the job of saving America was the most important job he’d ever have,” Cheung said in a statement to ABC News. “Before he entered the White House, he ensured everything was done within the ethics guidelines set forth.”
In addition to Trump’s adult sons Donald Trump Jr. and Eric Trump, who have for months been promoting World Liberty Financial on social media, a so-called “white paper” first reported by CoinBase indicated that Trump’s youngest son, Barron, 18, would also play a role in the firm.
Witkoff, who appeared Monday on the X livestream, said he introduced the Trumps to two other partners in the venture, Zak Folkman and Chase Herro, both of whom have a colorful business history.
Herro, who previously called himself a “dirtbag of the internet” at a crypto conference in 2018, has said he has made millions from an ecommerce business after spending three years in jail for selling drugs when he was in high school. Folkman, who first joined forces with Herro in the ecommerce business more than a decade ago, has reportedly previously taught classes on “how to date hotter girls.”
On ABC’s Good Morning America on Tuesday, Witkoff — a longtime friend to Trump and one of his campaign’s biggest financial supporters — downplayed any potential conflict posed by Trump’s foray into crypto.
“If the president is elected, which I expect him to be, then everything that he — all of his of his ownership, his businesses, will be put in some sort of a trust.” Witkoff said. “His children, I would assume, will be involved in running it. And I doubt that, therefore, that there is any conflict.”
But Danielle Brian, the executive director of the Project On Government Oversight, said that would be nothing more than “window dressing.”
“A trust managed by family members will not eliminate the conflict of interest created by a sitting president owning any business,” Brian said.
Trump’s announcement on Monday marked his transition from a vocal skeptic of digital currencies to one of the industry’s most enthusiastic proponents. As president, he complained on Twitter that crypto markets were “highly volatile and based on thin air.” In 2021, shortly after leaving the White House, Trump called cryptocurrencies a “scam.”
But during his 2024 bid for the White House, Trump has cozied up to crypto interests.
In May, his campaign said it would begin accepting contributions in cryptocurrency. Trump has regularly hosted industry enthusiasts at his properties and, in July, at the annual Bitcoin Conference, he pledged to make the U.S. the “crypto super-power” of the world.
(NEW YORK) — The Federal Reserve delivered a jumbo-sized rate cut this week in a move widely viewed as a declaration of victory over inflation and a signal of relief for borrowers.
Few areas of the economy welcomed the news more than the nation’s sluggish housing market, where high mortgage rates have largely shut out homebuyers.
Experts who spoke to ABC News cautioned that the rate cut would not deliver an immediate drop in mortgage rates or a loosening up of the housing market.
Mortgage rates had already dropped over recent months in anticipation of the rate cut, they said. They forecasted a gradual thaw in the market as homebuyers perk up and borrowing costs slowly decline.
“This is a harbinger of good times to come, but we’re not there yet,” Susan Wachter, a professor of real estate at University of Pennsylvania’s Wharton School of Business, told ABC News.
Here’s what to know about what the Fed’s rate cut means for mortgage rates and the housing market.
What does the Fed’s rate cut mean for mortgage rates?
The interest rate cut likely will not have a significant impact on mortgage rates over the short term, experts said. That’s because mortgage rates had already moved due to an expectation of this rate decision.
The average interest rate for a 30-year fixed mortgage stands at 6.09%, according to Freddie Mac data released on Thursday.
That figure has plummeted more than a percentage point since May. The average interest rate for a 30-year mortgage has dropped even further from a peak reached last October.
“Everybody has been talking about an expected drop in the Fed Funds rate,” Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors, told ABC News. “The mortgage market heard that loud and clear.”
Initial evidence suggesting unchanged mortgage rates can be found in the yield on a 10-year Treasury bond, experts said.
Mortgage rates closely track the yield on a 10-year Treasury bond, or the amount paid to a bondholder annually. In the aftermath of the Fed’s rate cut on Wednesday, the yield on a 10-year Treasury bond ticked slightly upward, defying the nudge downward by the central bank.
“Ten-year rates are basically pricing in the effect of interest rates coming down,” Lu Liu, a professor at the Wharton School at the University of Pennsylvania, told ABC News.
Still, experts added, mortgage rates may gradually decline over the remainder of 2024 and the duration of 2025.
The Federal Open Market Committee, a policymaking body at the Fed, on Wednesday forecasted further interest rate cuts.
By the end of 2024, interest rates will fall nearly another half of a percentage point from their current level of between 4.75% and 5%, according to FOMC projections. Interest rates will drop another percentage point over the course of 2025, the projections indicated.
If interest rates track those projections, then mortgage rates may see some decline as investors gain confidence that falling interest rates will not hit a snag, experts said.
“By the end of 2025, we can expect mortgage rates to be in the 5% range,” Wachter said.
Lautz offered a slightly less optimistic assessment, predicting mortgage rates next year in the high 5% range.
Uncertainty about the path of mortgage rates remains significant, said Liu. “It’s always a little bit of wait and see,” Liu said.
Experts agreed, however, that mortgage rates would not return to levels of between 2% and 3% enjoyed by homebuyers as recently as 2021. Those rates came in response to aggressive rate cuts at the Fed in response to COVID-19.
“That was a very unusual environment,” Lautz said. “It’s very unlikely to happen.”
What does the Fed’s rate cut mean for the housing market?
Experts expect the housing market to eventually heat up. But they do not expect the interest rate cut to deliver a sudden jolt.
The housing market remains sluggish. Existing-home sales declined 2.5% in August compared to the previous month, according to a report released by the National Association of Realtors on Thursday. The slowdown took place despite a significant decline in mortgage rates over that period.
The housing market will loosen up as low mortgage rates trickle through to homebuyers, and as those consumers proceed through the monthslong process of purchasing a home, experts said. The lower mortgage rates will also entice prospective buyers who previously balked at higher borrowing costs, they added.
Still, the current drop in mortgage rates may not rekindle the housing market, experts said, citing a phenomenon known as the “lock-in effect.”
While mortgage rates have fallen, they remain well above the rates enjoyed by most current homeowners, who may be reluctant to put their homes on the market and risk a much higher rate on their next mortgage.
In turn, the market could continue to suffer from a lack of supply, making options limited and prices sticky. Over the coming months, however, the housing market could loosen up, experts said.
“Now with rates coming down, we may gradually see some people willing to give up lower rates, move and sell their houses,” Liu said. “Hopefully there will be a little more supply on the market, but prices aren’t likely to come down all that much.”
Lautz agreed, predicting better days ahead. “It’s a slow burn,” she said. “We should see a change in activity and more buyers able to afford the market.”
(NEW YORK) — An escalation of conflicts in the Middle East in recent weeks has triggered a sharp increase in oil prices, raising uncertainty about where costs will head in the final weeks before Election Day.
Oil prices surged about 13% over an 11-day stretch ending on Monday. Prices fell markedly on Tuesday, however, as nearly a week passed without the onset of a widely anticipated Israeli counterattack on Iran.
The rise of oil prices carries potential implications for the presidential election next month. A hike in the cost of crude oil typically raises the price of gasoline, which holds substantial sway over general consumer attitudes, experts told ABC News.
For now, the recent increase in oil prices is not large enough to impact the election, experts said. However, they added, a further spike over the coming weeks could sour consumer sentiment and weaken approval of Vice President Kamala Harris, since her party occupies the White House.
“People use gasoline as a gauge of the economy and how they’re feeling about it,” Denton Cinquegrana, chief oil analyst at the Oil Price Information Service, told ABC News.
“A small change in prices probably won’t move the needle. If the price of a gallon goes up 50 cents, then that gets people’s attention,” Cinquegrana added, noting that such an increase is possible, but unlikely.
At least one expert cast doubt over the impact of even a sharp hike in oil and gas prices, saying it is unclear whether voters would fault Harris for the price spike and, even if they did, whether the few weeks remaining in the campaign affords enough time for higher prices to register with voters.
“People look at the economy over the long term, not the last month,” Jon Krosnick, a professor of political science at Stanford University who studies the relationship between gas prices and political perceptions, told ABC News.
In the aftermath of the Iranian attack on Israel last week, petroleum analysts told ABC News that the resulting spike in oil prices could push up gasoline prices between 10 and 15 cents per gallon. An increase of that magnitude would not affect the election, experts said, since the moderate uptick would do little to irk consumers and diminish their opinion about the nation’s economy.
“I do suspect that prices are going to continue to move higher, but I don’t think it will be significantly higher,” Cinquegrana said. “Unless something really goes haywire, I don’t expect prices to spike ahead of the election.”
A slight increase in gas prices may not matter much to consumers because costs at the pump have eased significantly over the past year, experts said.
Fuel prices have plummeted in recent months due to sluggish demand for gas as the busy summer traveling season has given way to an autumn slowdown. The average price of a gallon of gas is about 15% lower than where it stood a year ago, AAA data shows.
Despite its recent uptick, the price of oil has also fallen from a 2022 peak reached when the blazing-hot economic rebound from the pandemic collided with a supply shortage imposed by the Russia-Ukraine war.
A major escalation of the conflict between Israel and Iran, however, could send oil and gas prices much higher, analysts said, pointing to potentially dire consequences of an anticipated retaliatory strike by Israel against Iran.
While sanctions have constrained Iranian oil output in recent years, the nation asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply.
Intensification of the war could limit Iranian oil production or transport through the Strait of Hormuz, cutting global supply and sending prices upward, some experts said.
“The risk of a wider war in the Middle East has gone up,” Jim Burkhard, vice president and head of research for oil markets, energy and mobility at S&P Global, told ABC News. “There’s the risk of something happening that could lead to higher prices.”
A further surge in oil prices would send gas prices skyrocketing, which could damage Harris’ political fortunes if voters fault the Biden administration for the sudden increase in costs right before they cast their ballots, Carola Binder, an economics professor at the University of Texas at Austin who studies the relationship between gas prices and consumer attitudes, told ABC News.
“If there was a huge increase in gas prices, I could imagine that hurting Harris’ chances,” Binder said. “Consumer sentiment does affect elections.”
Such a forecast drew sharp disagreement from Krosnick, even though his research helped establish an understanding of the political implications of rising gas prices.
Krosnick co-authored a 2016 study in the academic journal Political Psychology that examined the relationship between gas prices and presidential approval rating between the mid-1970s and mid-2000s. The study found that elevated gas prices drove a president’s approval downward. To be exact, each 10-cent increase in the gas price was associated with more than half a percentage point decline in presidential approval, the research showed.
The findings do not shed light on a scenario in which gas prices spike ahead of next month’s election, Krosnick said, noting that his research examined shifts in public opinion over a much longer period of time. Plus, he added, voters may not fault Harris for the Middle East conflict that would drive the potential price increase.
“There isn’t enough time for there to be a sustained change in prices,” Krosnick said. “It takes a while to ripple out to consumers.”
