Bloomberg Daybreak: Europe Edition Daybreak Weekend: Tesla Results, Europe Earnings, China Tariff Reaction
Apr 18, 2025
Erica Edelberg, Bloomberg Intelligence's Chief Mortgage-Backed Securities Strategist, and Colm Murphy, China EcoGov reporter, dive into the latest financial trends. They discuss Tesla's recent struggles with declining deliveries and tariff impacts on the U.S. housing market. The duo explores how European companies are bracing for earnings amid trade volatility and how Chinese manufacturers are creatively navigating U.S. tariffs, including savvy TikTok strategies. Their insights reveal the complex interplay of market dynamics and international trade.
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Mortgage Rates Trump Home Prices
- Mortgage rates are the most critical factor in home buying decisions, even more than home prices.
- Small increases in mortgage rates significantly raise monthly payments, reducing affordability.
Tariffs Stall Fed, Keeping Rates High
- Tariff-driven inflation may stall Federal Reserve easing, keeping mortgage rates high.
- Mortgage borrowers likely won't see lower rates despite potential short-term Fed rate cuts.
Fed Avoids Buying Mortgages Again
- Unlike previous crises, the Fed is unlikely to buy mortgage-backed securities again to lower rates.
- The Fed aims to reduce its mortgage holdings, focusing on treasuries instead.