On The Market
Mortgage Rates Fall Fast as Tariffs Trigger Mass Stock Selloff, Economy at Risk
Apr 7, 2025
Recent tariff announcements have sparked fears of a stock market crash, yet a silver lining for real estate investors is the fall in mortgage rates. As economic uncertainty drives bond buying, rates may see further declines. The discussion highlights the profound impact of tariffs on global trade, particularly on reconstruction costs. Insights into investment strategies during market volatility are provided, encouraging calm decision-making amidst potential stagflation risks. The speakers detail the importance of adapting to shifting economic landscapes and protecting one's portfolio.
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Quick takeaways
- The recent tariffs announced by the Trump administration are expected to significantly increase construction costs, potentially raising homebuilding expenses by up to $22,000 per unit.
- Falling bond yields have led to lower mortgage rates, providing a potential opportunity for real estate investors despite the prevailing economic uncertainty.
Deep dives
Significant Tariff Changes
New U.S. tariffs have been introduced, marking a pivotal shift in economic policy that could have long-term implications. The baseline tariff is now set at 10% for all countries, with a notable 25% tariff on automobiles. Additionally, reciprocal tariffs are being implemented on countries deemed as top offenders, calculated as half of the tariffs they impose on U.S. goods. This broad-reaching approach suggests that tariffs and de-globalization will be fundamental aspects of U.S. policy moving forward, impacting a wide range of stakeholders from consumers to businesses.
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