TikTok loses challenge against law requiring sale or ban

(WASHINGTON) — Housing prices are soaring twice as fast as overall inflation. The average rate on a 30-year mortgage topped 7% in January for the first time since last spring. Observers as disparate as J.P. Morgan and the left-leaning nonprofit Center for American Progress have declared a “housing affordability crisis.”

The cost crunch could last longer or even worsen, however, as a result of potential tariffs on Mexico and Canada, experts told ABC News.

The Trump administration threatened to impose 25% tariffs on Mexico and Canada, but the U.S. reached an agreement with each of those countries on Monday to pause the tariffs for one month.

Such duties would likely raise expenses for imported home-building materials, hiking construction costs and increasing home prices, some experts said. Meanwhile, they added, potential price increases for a range of goods across the economy could pressure the Fed to raise interest rates, which in turn would push mortgage rates even higher.

“There are a lot of questions about how we can deal with the housing affordability crisis — these tariffs would do the exact opposite,” Gregg Colburn, a real estate professor at the University of Washington, told ABC News.

In a series of social media posts over recent days, President Donald Trump said the tariffs target Canada, Mexico and China for hosting the manufacture and transport of illicit drugs that end up in the United States. In a Truth Social post on Sunday, Trump urged the three countries to address his concerns, while acknowledging the tariffs may cause some financial hardship within the U.S.

“WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID,” Trump wrote.

The Trump administration did not immediately respond to ABC News’ request for comment.

Roughly 30% of softwood lumber used in the U.S. is made up of imports, which arrive primarily from Canada. Another component of home construction, wallboard, originates mostly in Mexico, according to tracking site Global Gypsum.

Experts said they expect the prices of soft lumber and wallboard to rise if tariffs on Mexico and Canada take effect, since importers typically pass along a share of the cost of those higher taxes to buyers.

In turn, the added homebuilding costs could push up home prices, putting some of the cost burden onto homebuyers, the experts said.

“It will increase home prices by a noticeable amount,” Ken Johnson, a real estate economist at the University of Mississippi, told ABC News.

Home prices surged about 24% over a nearly two-year period beginning at the outset of the pandemic in December 2019, the fastest rate on record, researchers at the National Bureau of Economic Research found.

Price hikes have slowed since then, however. Home prices rose about 4.5% in 2024, Goldman Sachs said.

“Prices have stopped rising at these incredible rates,” Johnson said, but he warned they could pick up again after tariffs. “People will feel it,” he added.

Tariffs may also impact another source of housing cost woes: high mortgage rates.

The average rate for a 30-year fixed mortgage stands at 6.95%, Freddie Mac data last week showed. That figure has ticked up over recent months, despite a series of interest rate cuts at the Federal Reserve.

Last week, Fed Chair Jerome Powell left interest rates unchanged, saying further rate cuts may slow over the course of 2025.

Duties on Mexico and Canada could further delay interest rate cuts or even trigger rate hikes, since the Fed may move to fight a potential burst of inflation, some experts said.

“If costs are going up, the Fed will do what it’s mandated to do,” Marc Norman, associate dean at the New York University School of Professional Studies and Schack Institute of Real Estate, told ABC News.

The Fed’s benchmark interest rate helps set the level of mortgage rates, which closely track the yield on a 10-year Treasury bond, or the amount paid to a bondholder annually.

If the Fed raises rates in order to control tariff-induced inflation, mortgages could very well rise, some experts said.

“The worry is the Fed might respond to potential inflation growth by either not lowering their rates or by raising their rates, which could lead to higher mortgage rates,” Johnson said.

But the tariffs may not worsen affordability challenges much, Norman said, in part because they would arrive at a moment when challenges already abound, including insufficient housing supply and high construction costs.

“We’re in a crisis already,” Norman said.

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(WASHINGTON) — The Federal Reserve held interest rates steady on Wednesday, just days after President Donald Trump called on the central bank to lower them.

The announcement put the central bank on a potential collision course with Trump, though a longstanding norm of independence typically insulates the Fed from direct political interference.

The decision to maintain the current level of interest rates pauses a series of three consecutive interest rate cuts imposed by the Fed over the final months of 2024.

The Federal Open Market Committee (FOMC), a policymaking body at the Fed, said on Wednesday that the central bank remains attentive to concerns centered on the potential for both a rise in unemployment and a surge of inflation. Inflation stands at a moderately elevated rate, while unemployment remains at a historically low level, the FOMC added.

Taken together, those two considerations — employment and inflation — make up the Fed’s “dual mandate.”

“The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance,” the FOMC said. 

“The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.”

The Fed indicated last month that it would cut interest rates at a slower pace than it had previously forecast, however, pointing to a bout of resurgent inflation. That forecast sent stock prices plummeting, though markets have broadly recovered the losses.

Inflation has slowed dramatically from a peak of more than 9% in June 2022, but price increases remain nearly a percentage point higher than the Fed’s target rate of 2%.

During a virtual address to the World Economic Forum in Davos, Switzerland, last week, Trump demanded a drop in interest rates after calling for a reduction of oil prices set by a group of nations known as OPEC, which includes Saudi Arabia.

The prospect of low oil prices will enable the Fed to dial back its fight against inflation and bring down interest rates, Trump said.

“I’m going to ask Saudi Arabia and OPEC to bring down the cost of oil,” Trump said, later adding: “With oil prices going down, I’ll demand that interest rates drop immediately.”

The U.S. does not belong to OPEC, nor does the president play a role in the organization’s decisions regarding the price of oil sold by its member states.

Several past presidents have sought to influence the Fed’s interest rate policy, including Trump, who repeatedly spoke out in favor of low interest rates during his first term.

On the campaign trail in August, Trump said a U.S. president should have a role in setting interest rates.

Fed Chair Jerome Powell struck a defiant tone in November when posed with the question of whether he would resign from his position if asked by Trump.

“No,” Powell told reporters assembled at a press conference in Washington, D.C., blocks away from the White House.

When asked whether Trump could fire or demote him, Powell stated: “Not permitted under the law.”

The Fed retreated in its fight against inflation over the final months of last year, lowering interest rates by a percentage point. Still, the Fed’s interest rate remains at a historically high level of between 4.25% and 4.5%.

Last month, Powell said the central bank may proceed at a slower pace with future rate cuts, in part because it has now lowered interest rates a substantial amount.

Powell also said a recent resurgence of inflation influenced the Fed’s expectations, noting that some policymakers considered uncertainty tied to potential policy changes under Trump.

“It’s common-sense thinking that when the path is uncertain, you get a little slower,” Powell said. “It’s not unlike driving on a foggy night or walking around in a dark room full of furniture.”

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(NEW YORK) — Walmart, the world’s largest retailer, is rolling back its diversity, equity and inclusion policies.

This brings it in line with several major corporations that have reviewed their operational practices after facing considerable pressure from conservatives.

No longer considering race and gender as a way to increase diversity when it offers supplier contracts, is an example of the retailer’s reported rollbacks, according to the Associated Press.

The company said it didn’t currently have quotas and didn’t plan to going forward; however, it planned to stop collecting demographic data when determining financing eligibility for grants.

In a statement to ABC News, Walmart said, “Our purpose, to help people save money and live better, has been at our core since our founding 62 years ago and continues to guide us today. We can deliver on it because we are willing to change alongside our associates and customers who represent all of America.”

“We’ve been on a journey and know we aren’t perfect,” the statement continued, “but every decision comes from a place of wanting to foster a sense of belonging, to open doors to opportunities for all our associates, customers and suppliers and to be a Walmart for everyone.”

Walmart will also be “reviewing grants to Pride events to make sure it is not financially supporting sexualized content targeting kids,” the retail giant told AP.

The changes also extend to Walmart’s sizable third-party marketplace.

For example, those third-party retailers would no longer be able to list and sell “sexual and transgender products aimed at minors,” the company said. An example is chest binders for young people who may be using the products as part of their gender-affirming care.

The world’s largest retailer confirmed the changes on Monday.

They were first announced in a post on X by conservative political commentator Robby Starbuck.

He said that he had been in touch with the Arkansas-based corporation about a story he was doing about “wokeness,” which turned into “productive conversations” — and, ultimately, led to reversals in Walmart’s approaches to DEI.

Other changes that Starbuck listed in his announcement included: discontinuing racial equity training through the Racial Equity Institute, no longer participating in the Human Rights Coalition’s Corporate Equity Index (a national benchmarking tool for LGBTQ individuals) and eliminating the use of Latinx (a gender-neutral word for anyone of Latin descent).

He also stated that Walmart will be eliminating the use of the phrase “DEI” altogether.

“This is the biggest win yet for our movement to end wokeness in corporate America,” wrote Starbuck, who has also gone after companies including Boeing, Lowe’s, Tractor Supply and Deere & Co.

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