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Frank Gargano A U.S. consumer watchdog looks poised to tear up a rule on customer financial data sharing and start all over again — but with a depleted staff, a potentially drained budget and all of the same thorny issues.The Consumer Financial Protection Bureau is likely to scratch and rework its open-banking rule, which requires banks to share their customers' deposit account and credit card information when they request it with fintech firms for free. While such a move is ostensibly a win for large banks including JPMorganChase, which lobbied against the measure, it could re-open the fight and risk expanding its scope at a time when the CFPB's fate is in doubt. "Open banking pits two sides of industry against each other, with consumers somewhere in the middle," Dan Murphy, who managed the CFPB's open banking program during the Biden administration and is now an independent consultant, wrote in a post on Friday. "Want to give the banks the ability to charge fees for consumer-permissioned data access? Good luck explaining that to fintechs. Want to let fintechs do whatever they want with consumer-permissioned data? Good luck explaining that to banks."Going back to the drawing board on the rule — finalized late last year in a near 600-page document — risks dredging up numerous issues. Even though banks bristled at open banking, arguing the requisite data-sharing arrangements would stoke fraud and expose them to greater liability, some appreciated the clarity once it was instated and made investments to comply. The Financial Data Exchange said last month that 114 million secure customer connections have now been established between fintechs, banks and other financial firms compared to 76 million a year ago. "Millions and millions of dollars have been spent on this," said Cathy Brennan, a partner with the law firm Hudson Cook, who counsels financial companies. Representatives at the CFPB didn't immediately respond to a request for comment. Reworked 1033 ruleThe agency is leaning toward fully vacating the rule and aims to rewrite it, Bloomberg Law reported earlier this month. But how it could rework it is unclear. If the CFPB allows banks to charge fees for sharing data and limits their liability for breaches, that would be a boon for those firms. But the watchdog could also expand the measure's scope, requiring banks share data on other financial products beyond deposit accounts and credit cards. Fintechs, which argue the open banking rule empowers consumers and boosts competition, have been pushing to include products such as auto loans and mortgages. JPMorgan Chief Executive Officer Jamie Dimon voiced opposition to the open banking measure, saying at an October conference that it creates risk for customers and for payment systems. His bank also made a private push, engaging more frequently with the CFPB than other large banks as it deliberated on the rule under the Biden administration, according to a person familiar with the matter. PNC Financial Services Group CEO Bill Demchak said during an October 2023 earnings call that customer data must be shared "in a secure manner."A representative for PNC declined to comment. Representatives for JPMorgan didn't immediately respond to a request for comment. Reworking the rule poses a potential issue for smaller banks. Currently, firms with less than $850 million in assets are exempted from having to comply. A reconfiguration raises the possibility that threshold is scratched.CFPB's fateThe question of whether the CFPB even has the ability to overhaul the measure remains. The rule took years to finalize — passing in October some 14 years after the statute introducing it was completed. A pair of bank lobby groups immediately sued the CFPB to block it. The Financial Technology Association, an industry group, has since challenged that, potentially allowing it to defend the CFPB's open banking rule if the agency opts not to. A federal judge in Kentucky is expected to decide whether the FTA can defend the rule by the end of the month. Both the CFPB and the bank plaintiffs said they weren't opposed to the FTA intervening in the litigation to defend the open banking rule in Monday court filings.Under Trump, the agency has been curtailed, with its work overseeing financial companies largely suspended. A bid by CFPB Acting Director Russell Vought to fire just under 90% of the CFPB's roughly 1,700 employees is being litigated. Amid the uncertainty, many senior CFPB staffers have voluntarily left the agency, including the Biden-era general counsel Seth Frotman and open banking liaison Murphy. How that litigation plays out is unclear, but even if opponents of Vought's cuts win, the agency's budget is also likely to tumble under legislation being advanced by House Republicans.The agency's fate was further clouded Friday with a surprise announcement that Trump's pick to lead the agency — Jonathan McKernan — was instead going to the Treasury Department. Back in courtWriting the open banking rule while fully staffed took more than five years, according to Dan Quan, a former CFPB senior adviser on technology issues and the founder of venture capital firm Nevcaut Ventures. Rewriting it with a skeletal staff and a shoestring budget will be daunting, he said."It's just impossible to undertake a rewriting of this rule," Quan said.Even if the CFPB is able to finalize a new rule that satisfies banks' concerns, fintechs are likely to head to court arguing the agency exceeded its authority in the rewrite, said Todd Phillips, an assistant professor of legal studies at Georgia State University's Robinson College of Business and a former Federal Deposit Insurance Corp. attorney."If they're going to rewrite the rule, it's just going to end up back in court," Phillips said.

President Donald Trump's campaign tax pledges — no taxes on tips and overtime pay, plus new tax breaks for car buyers and seniors — are the centerpiece of a multitrillion dollar package that will serve as Republicans' signature legislative effort.In a draft version of the tax bill released on Monday, House Republicans highlighted the president's populist priorities in a package that would enact those cuts through 2028. The bill would also make the lower individual tax rates Trump signed in 2017 permanent.READ MORE: Most economists expect rate cuts after JulyThe bill addressed a tax issue that has been dividing lawmakers since it was first restricted by Trump in 2017: the $10,000 cap on the state and local tax deduction. The plan raises the SALT limit to $30,000, but with limits for individuals earning more than $200,000 or couples making twice that. The proposal, notably, doesn't include a tax hike on the wealthiest Americans, after weeks of debate among Republicans about whether to raise levies on millionaires. The bill would permanently extend the 37% top rate for individuals that was set in Trump's 2017 tax law. That's despite Trump telling House Speaker Mike Johnson as recently as last week that he wanted a 39.6% rate for individuals making more than $2.5 million."The president loves the bill. He met with Jason Smith on Friday and it's a great first step," top Trump economic adviser Kevin Hassett told reporters Monday, referring to the House Ways and Means Committee Chair who led the effort to craft the tax bill. The package — which Trump has dubbed his "one big, beautiful bill" — is the totality of his legislative agenda. The bill is officially scored as losing $3.7 trillion in revenue over 10 years, within the $4.5 trillion limit lawmakers set for themselves. But narrow Republican margins in the House mean that the president needs nearly unanimous support from his party to pass the bill.The plan will take a big step toward advancing through the House as soon as this week, with the House Ways and Means Committee scheduled to begin debate on it on Tuesday.READ MORE: Where the highest property tax bills are foundJohnson told reporters Monday that the House is on track to pass the legislation by Memorial Day. It would then go the Senate where it could be subject to major revisions.Among provisions up for debate: the amount to increase the nation's borrowing authority. The House bill calls for a $4 trillion increase, smaller than the Senate's preferred $5 trillion level. Lawmakers are hoping to push any additional votes on raising the debt ceiling until after the 2026 midterm elections. Promises MadeThe draft language includes several of the unorthodox proposals that were central to Trump's campaign message: no taxes on tipped wages — an idea he said came from a waitress — and eliminating levies on overtime pay. The plan also calls making the interest on car loans deductible, similar to how mortgage interest can be written off. But the car buyers can only claim the break on American-made vehicles, underscoring Trump's desire to boost US manufacturing.Trump had also campaigned on ending taxes on Social Security benefits, but that runs afoul of the budget rules Republicans are using to pass the bill. Instead, the bill provides a $4,000 bonus for seniors on top of the regular standard deduction.One of the thorniest issues — the contentious standoff over increasing the SALT deduction — may still be up for debate. Some lawmakers representing high-tax areas want an even bigger tax break, as much as $124,000 for joint filers, a far cry from the $30,000 cap included in the legislation.READ MORE: Property taxes up 10.4% in past three yearsThe package lays out new levies. It would impose a new tax on private foundations of up to 10% and a new tax on foreign remittance of 5%, subject to exemptions. Also on the hook for tax increases: wealthy private universities, which could see an increase in the levy on endowments from 1.4% to as high as 21% on investment income.Multinational companies would get an extension of current lower rates on foreign profits, marking a win for corporate America.Tax breaks benefiting the renewable energy sector are also set to be scaled back. Popular production and investment tax credits for clean electricity would be phased out by the end of 2031, and new requirements against using materials from certain foreign nations would be added. The $7,500 consumer tax credit for the purchase of an electric vehicle would be fully eliminated by the end of 2026. Monday's draft bill came after the tax-writing committee released some initial provisions late Friday. Those included raising the maximum child tax credit to $2,500 from $2,000 and increasing the standard deduction, both retroactive to 2025 to put more money in voters' pockets before the 2026 elections. The bill also raises the estate tax exemption to $15 million and increases the 20% deduction for closely held businesses to 23%.While the bill would include roughly $1.5 trillion in spending cuts over the next decade, that wouldn't come close to covering the roughly $4 trillion in tax cuts outlined in the plan, meaning it would likely add to deficits in the coming years.Republicans have pointed to tariffs as a key source of revenue to help offset the deficit impact from the tax bill, and data out Monday showed customs duties jumped to a record $16 billion in April. The revenue won't be officially scored as paying for the bill since the text doesn't enact the emergency Trump tariffs into law.Following Monday's agreement between Beijing and Washington to deescalate the trade war, the Yale Budget Lab estimated all tariffs to date in 2025 would bring in roughly $2.3 trillion over the next decade if they remain in place, after accounting for the negative economic effects from higher levies.

Bloomberg News Prices continued to trend down toward the Federal Reserve's 2% target last month despite the rollout of sweeping tariff hikes.The Consumer Price Index rose 0.2% in April for an annualized increase of 2.3%. Core CPI, which factors out food and energy, was up 0.2% on the month and 2.8% year over year.The readings for both headline and core CPI matched the Wall Street consensus forecasts. The headline figure declined by 0.1% in March, driven by falling energy prices, while the core index ticked up 0.1%. The April report from the Bureau of Labor Statistics will be welcomed by the Federal Reserve, which voted earlier this week to hold its benchmark interest rate steady as it awaits a clearer signal of either economic deterioration or price stabilization. Technically, the Fed targets 2% core inflation relative to a different government index, the Personal Consumption Expenditure index. The levels on the two readings are slightly different, but tend to rise and fall together. The news is welcome news for the Fed and its effort to bring inflation to heel, but the report is only a single data point in the current ambiguous economic policy environment. The April reading comes just one day after the White House announced a 90-day mutual pause in steep tariffs between the U.S. and China. In a note distributed Monday, BMO Capital Markets analyst Ian Lyngen said most investors would view the report from the Bureau of Labor Statistics as "stale information" because it sheds no light on the biggest questions of the moment: whether the trade environment is driving up prices and what that means for the trajectory of interest rates. "This leaves the U.S. rates market in headline-watching mode for anything further related to the evolution of global trade and insight on how quickly investors might expect progress on other bilateral trade agreements," Lyngen wrote.Ahead of Tuesday's release, there were mixed feelings about whether market participants and observers should expect to see noticeable price changes so soon after President Donald Trump's so-called Liberation Day announcements. Andy Schneider, senior U.S. economist with BNP Paribas, wrote in a note last week that it was "too early" to see significant changes in price growth attributable to the tariffs. He added that many firms are stuck between the "push and pull between contending with increasingly high tariff rates and uncertainty over their persistence at current levels."BNP projected a headline CPI increase of 0.2% and a core CPI uptick of 0.26%, but Schneider noted that further increases are expected later in the year."We maintain our long-held view that tariffs will translate to substantially higher U.S. inflation," he wrote. "We see domestic prices heating up materially by summer, with [year-on-year] core CPI peaking at 4.4% by Q2 2026."Fed Gov. Adriana Kugler, in a Monday morning speech, pointed to recent survey data from the Federal Reserve Bank of Dallas indicating that more than half of businesses in the 11th District planned to pass tariff costs on to customers, with 26% saying they would do so upon the announcement of the levies. Another 64%, however, said they would do so within three months of the tariffs' implementation.While it does not appear that such costs have been conveyed to consumers at large scale, Kugler warned that if they are, the effects on the economy could be far reaching and detrimental."Given these expected price increases, real incomes will fall, and operating costs will rise, which will lead consumers to demand fewer final goods and services and firms to demand fewer inputs," she said. "Ultimately, I see the U.S. as likely to experience lower growth and higher inflation."Yet, despite this outlook, Kugler said she is content for the Federal Open Market Committee to keep its policy rate unchanged until the economic trajectory comes into better focus."With inflation and employment potentially moving in opposite directions down the road, I will closely monitor developments as I consider the future path of policy," she said.

Economists surveyed by Wolters Kluwer remain solidly behind the notion that the Federal Open Market Committee will reduce short-term rates in 2025.Its May Blue Chip Economic Indicators report even included the possibility that the Fed could actually raise interest rates in 2025 based on comments made by Chairman Jerome Powell which the authors noted could open the door to such a move. None of those panelists, however, are expecting a hike. But the consensus average regarding the size of a rate reduction for all of 2025 came out at 60 basis points, down from 65 basis points in the April BCEI survey.The latest survey was conducted on May 5 and 6, the second day being the start of the FOMC meeting; after it concluded the Fed announced it was taking no actions. If not now, when will the Fed cut rates?The survey found that 20% of the respondents believe the next cut will be in June, with 29% in July and 51% starting even later. Approximately 9 out of 10 expect a 25 basis point cut, with 10% at 50%,The report did come out before the announcement of a pause on tariffs with China, but the initial April 2 announcement resulted in a "pronounced shift" in the panelists' forecast a month ago.On the China news, the 10-year Treasury closed on May 12 at 4.46%, up 8 basis points on the day. On May 1, the yield was at a low of 4.12%.Meanwhile, the 30-year fixed on Monday afternoon was just shy of 7%, at 6.97%, according to Zillow. The Lender Price rate tracker on the National Mortgage News website was at 6.95%. Both were higher than last Thursday, the day after the FOMC meeting.Is the U.S. heading for a recession soon?An April 9 announcement of a 90-day pause in reciprocal tariffs with other countries did not ease recession concerns among BCEI panelists, as their responses on the probability of one occurring over the next 12 months was "essentially unchanged" between April and May. Just under half, 47%, said the U.S. will have a recession in the following 12 months.As for inflation, the likelihood that tariffs would lead to one-time price changes was a view held by 54%, while 44% were worried about longer-lasting effects."The Blue Chip forecast involves a dose of stagflation, but it is mild relative to the experience in the 1970s and 1980 and it is projected to be brief," Wolters Kluwer said.The report pointed out futures contracts for the Fed Fund Rate suggest the market is looking at reductions of 50 basis points over the next six months and 100 basis points through the 12-month period.While the short-term rates controlled by the FOMC do not directly impact mortgage rates, they are indicators on views of the U.S. economy that investors use when pricing longer-term instruments like the 10-year Treasury yield.The role of inflation in the decision"Inflation expectations will likely be the most important factor driving Fed decisions in the months ahead," the survey report said. "If long-term inflation expectations remain anchored, Fed officials would likely conclude that tariffs will fuel primarily one-time price increases rather than ongoing inflation."In this case, the FOMC would likely address slow economic growth and elevated unemployment. But evidence of stable expectations must be convincing to policymakers lest they repeat the misdiagnosis of transitory inflation they made in 2021 and 2022, which resulted in the run-up of mortgage rates during the period.

New York Attorney General and long-time legal adversary to Donald Trump Letitia James faces a federal grand jury investigation involving her role in multiple mortgage transactions, according to several news sources. The investigation, which is being led by the Department of Justice and the FBI, revolves around fraud allegations made by Federal Housing Finance Agency Director Bill Pulte in a letter last month, claiming James falsified documents and records in Virginia and New York State. News of the grand jury was previously reported by outlets, including The Washington Post and CBS. In a criminal referral addressed to Attorney General Pam Bondi, Pulte claimed James affirmed that a 2023 property purchased in Norfolk, Virginia, would be her primary address, despite requirements that she live in New York as an elected official. A primary residence would qualify for more loans than if it was being used as a secondary or investment property. Pulte also pointed to a 2001 multifamily transaction in Brooklyn, New York, which James said contained four separate dwellings. The FHFA director alleged the property had five units available, and James intentionally misrepresented its size at the time of purchase to qualify for conforming mortgage rates.   Going back further, the FHFA director also claimed James and her father signed mortgage documents in 1983 as husband and wife, which would have given them more favorable terms.  If allegations are proven correct, James could face civil fraud charges.  The New York attorney general respondsIn interviews conducted after Pulte made his initial claims, New York's attorney general called the accusations "baseless" and labeled Pulte's actions as political retaliation following her successful prosecution against President Trump in a property fraud case. Last year, a New York judge ordered Trump to pay a fine totaling more than $500 million, including accrued interest, after being found guilty of falsifying valuations and his own net worth to obtain favorable deal terms. The case is currently under appeal.In late April, James hired criminal defense attorney Abbe Lowell as counsel to help fight accusations. Previously a partner at Winston & Strawn, Lowell served as co-chair of its white collar, regulatory and investigations practice group and previously defended Hunter Biden against gun and tax charges. Past clients also include Ivanka Trump and Jared Kushner, the current president's daughter and son-in-law.In a letter sent to Bondi, Lowell said Pulte was engaged in carrying out the "all-too-familiar playbook of the president" to praise the judicial system when he wins and criticize it when he loses, attacking attorneys and judges involved. In the Virginia case, Lowell accused Pulte of misstating James' intent based on one improperly completed document in a loan file consisting of hundreds of pages."Director Pulte cherry-picked an August 17, 2023 power of attorney that mistakenly stated the property to be Ms. James' principal residence and at the same time absolutely ignored her very clear and all caps statement two weeks earlier to the mortgage loan broker that "[t]his property WILL NOT be my primary residence," Lowell wrote.  In the 2001 charge, Lowell pointed to a loan-modification application and New York City public records confirming the Brooklyn property was classified as a four-unit dwelling."Look at the entire file of each event, the haste in which one document has one line filled out in error, and the clear fact that, with the exception of attending school, Attorney General James has only lived in Brooklyn, and the "criminal referral" becomes three pages of stale, threadbare allegations with no reason to proceed," the  letter stated. After taking on James' case, James' attorney opened up a new practice, Lowell & Associates, to help defend individuals targeted by President Trump. Pulte's fraud focusSince Pulte took over as FHFA director, rooting out fraud at the agency has emerged as a priority, serving as motivation for many of his moves and a frequent theme of his communications, particularly in social media posts.  In announcing layoffs at Fannie Mae last month, Pulte alluded to unethical behavior of former employees but provided no clarification on exact numbers or the type of infractions involved.Pulte also said he planned to open communications between Fannie Mae and Freddie Mac in an effort to combat fraud and introduced an email tip line for the public to  report possible instances.

Bloomberg News The U.S. and China have agreed to pause the bulk of their tariff policies against one another for 90 days, sending a jolt of optimism through the banking sector and its investors.The temporary truce was struck over the weekend and announced on Monday, causing stocks to rally and credit spreads to tighten on be the belief that an economic calamity had been avoided, at least in the near term. The KBW Nasdaq Bank Index was up more than 4.5% on the day, beating the S&P 500, which was up 2.6%, and even the tech-heavy Nasdaq, which was up 4.2%. "Clearly it's a positive," said John Buran, CEO of New York-based Flushing Bank. "It's providing a certain level of stability, and maybe indications of a more manageable level of tariffs on a go-forward basis."Even so, other parts of the financial sector were less moved by the detente. Peter Earle, director of economics and economic research at the American Institute of Economic Research, pointed to yields on 10-year Treasury bonds rising faster than those on 3-month bills as a sign of shaky confidence. "There's a lot of skepticism in the bond market about what this new information actually means and how durable it is," Earle said. "Investors are wary of locking in capital at lower yields given the way Trump has done this. The potential for reignition of trade friction is very high. This can all be reversed with a single tweet."As a result of the truce, the U.S. will lower the import levy on Chinese goods from more than 145% to 10%, matching the rate applied to most other countries last month. With sectoral tariffs on steel and pharmaceuticals, as well as fentanyl-related policies, the effective rate against China is between 30% and 35%. This brings the aggregate weighted average tariff down from roughly 24% to approximately 15%, according to analysis from UBS Investment Bank.The remaining tariff levels are well above where they were before April 2, when President Donald Trump rolled out his sweeping "Liberation Day" trade policy, exceeding even the most extreme forecasts that preceded the announcement. Michael Redmond, a U.S. policy economist with Medley Global Advisors, said the prior level of tariffs were effectively embargoes for more than half of Chinese exports to the U.S., too large for many importers to absorb or viably pass on to customers. If those levy rates had remained, he said, they would have weighed heavily on global supply chains and had a devastating impact on the U.S. economy.Under the truce — which could be a template for a permanent deal — firms should be able to take on the higher costs, Redmond said, noting that banks could play a role in facilitating the transition to higher import costs. "Some smaller businesses that didn't have the cashflow to absorb a large tariff hike like they were expecting, now if it's something that's uncomfortably high but manageable they might borrow," he said. "It might make sense to draw down on their credit lines to pay that import bill."China, meanwhile, will lower its tariffs against the U.S. from 125% to 10%. This easing is particularly important for the U.S. agriculture industry and the banks that support it. Mark Scanlan, senior vice president of agriculture and rural policy for the Independent Community Bankers America, said the prior rate effectively barred American farmers from China, the third largest market for U.S. agricultural exports. With overall exports accounting for 20% of U.S. agricultural output, the trade barrier has depressed commodity prices and hindered borrowers' abilities to repay their lenders — more than 80% of which are community banks. Scanlan said Monday's announcement was a positive for ag banking and potentially a sign of further deescalation to come. He added that many ICBA members hope the ongoing trade negotiations will ultimately expand their export opportunities to China — as part of the Trump administration's push for balanced trade — but the longer the process drags out, the more damage will be wrought on U.S. farmers and, by extension, their banks."We hope that, as things move forward, both sides will come to an agreement and the ag sector doesn't suffer long-term harm," he said. "If it goes on for a long time, you can lose market share to other countries who would be willing to sell the same products."Scanlan said banks have worked with farmers who have fallen behind on payments and are exploring new ways to do so. If the commodity price disruption continues, though, he said it could put pressure on lawmakers to issue direct aid to producers to help them offset their losses and pay down their debts.No such relief is being considered for small businesses, but the impact of the new global tariff regime has had an outsized impact on Main Street, said Molly Day, vice president of public affairs for the National Association of Small Businesses. According to a survey released by the group last week, 40% of small businesses source goods from outside the U.S. but more than half have been impacted, either directly or indirectly, by supply chain disruptions.As a result of these uncertainties, Day said 40% of small businesses are having a harder time accessing the credit they need, up from the long-term average of 34%. She added that, anecdotally, many business owners have said they are reluctant to seek new loans until there is more certainty about the economic outlook."I suspect loan demand is down because there is such high economic uncertainty. That's actually the number one challenge to small businesses today and it's higher than it's been in years," Day said. "When things are like this, people aren't really eager to take on new debt because who knows what's around the corner."Nathan Place contributed to this report.

Signs from early April that the housing market is coming around will help the title industry's performance on what has been a slow start to the spring season.However, the biggest news that shook up the industry took place on April 10 at the second largest company by total volume. Following an incident on a cruise ship, which resulted in arrest, First American Financial fired its CEO Kenneth DeGiorgio and replaced him with Mark Seaton, the chief financial officer.It was a tabloid-headline start to a second quarter that some in the title business are saying is a mixed bag impacted by President Trump's tariff announcements."For those that monitor the housing market trends closely, it is clear to see that we have an educated consumer base sitting on the sidelines, poised and ready to take advantage of a quick rate drop or changes to market conditions that make buying a home more accessible," Stewart Information Services CEO Fred Eppinger said on the company's earnings call. "Unlike last year, the housing inventory is at a higher level of both quality and volume."Title insurers have a strong tie to what happens in the mortgage originations market, both purchase and refi. The first quarter is typically a slow one for their transactions as a result. "Residential originations continue to be at trough levels, both in terms of purchase and refinance, but we experienced revenue improvement in both markets this quarter," First American's Seaton added on its earnings call. "Real estate goes in cycles, and we're at the very beginning of the next cycle."After the quarter ended, Dream Finders Homes closed on its previously announced purchase of Alliant National Title. It joins Lennar, who owns 8% of Title Resource Group after the latter bought Doma; Pulte; DH Horton; and Shaddock National Holdings as homebuilders who own underwriters.A pair of mortgage insurers, Essent Group and Radian Group, also operate title insurers.Meanwhile, Blend Labs is looking to make an exit from title agency, putting the Title365 business it acquired from Mr. Cooper in 2021 up for sale, it said on its first quarter earnings call.The following is a roundup of earnings at the four largest title insurers, plus one stand-alone publicly traded company.

Over the weekend, the United States and China reached a temporary deal to cut tariffs tremendously.Instead of an astronomical 145% rate, the U.S. will now impose a much more reasonable 30% rate on imports from China.This should get business (and ships) moving again, though it should be noted that it’s only a 90-day pause.Investors cheered the news, believing more severe economic fallout such as a recession could now be averted.But the risk-on move has hurt bonds, and by nature mortgage rates, which have seen reduced demand in the process.Risk-On Trade Means Mortgage Rates Might Go HigherAt last glance, the 10-year bond yield was about 20 basis points (bps) higher than it was before the trade deals began being reported last week.We got a U.K. trade deal on May 8th, which resulted in a bump, followed by a China deal today, which led to another bump up.Mortgage rates correlate very well with the 10-year bond yield, and as such have risen a bit as well.However, because of the trade deals and the perceived reduction in volatility, mortgage spreads have improved to offset those gains.So some of the increase you’d expect from higher bond yields means mortgage rates aren’t actually much higher.Ultimately, the 30-year fixed has been pretty flat over the past week, at least according to MND.We’re basically just hovering around 6.875% to 6.90%, where we otherwise might be pushing 7% again.In other words, the trade deals are semi-neutral for mortgage rates at this juncture.The market is kind of digesting it as a return to normalcy, which isn’t majorly bullish or bearish for mortgage rates.At the same time, it’s important to remember this a temporary deal and before long, folks will be asking questions about what happens next.This could mean relatively flat interest rates for the rest of the second quarter as investors take a wait-and-see approach.Economic Data Will Matter Again, with an AsteriskWith the trade tensions and tariffs now off the boil, economic data will retake center stage.This means things that normally matter to mortgage rates, like the jobs report and the CPI report will dictate the direction of rates again.Speaking of, CPI is due out tomorrow and that will be something to watch to determine how inflation is doing.The one problem though is because of the past couple months, we might see anomalies in the economic data.Will we see an uptick in inflation related to supply chain disruptions? Will we see an increase in unemployment?What will economists make of it? Will they write it off as a temporary trade-related issue and not something to take too seriously?And what about the Fed? How will Jerome Powell and company look at this data as it is unveiled?If anything, it could push out any expected policy decisions as the data smooths and tells a clearer story.That too could mean stubbornly flat mortgage rates for the next few months, at a key time of the year when home buying is historically strongest.It will also dampen refinance activity, especially rate and term refinances that are harder to pencil for recent home buyers.But Mortgage Rates Could Still Trend Lower as the Year ProgressesOne major mortgage rate headwind has been removed thanks to the trade dealBut it’s still only temporary and could rear its head a few months from nowIn the meantime spreads could improve and rates may slowly tick down as economic data comes inBut we might see stubborn movement through summer as caution remains and other issues like the spending bill surfaceDespite what now feels like a little bit of a holding pattern for mortgage rates, they may slowly ease as the year progresses.If we actually reach a permanent deal with China and get this tricky stuff behind us, the economic data will be the driver once more.Even before the trade war got underway, economic conditions were clearly cooling. If they continue to show signs of cooling this year, interest rates might tick down as well.Remember, slowing economy = lower mortgage rates, all else equal.Perhaps more importantly, the Fed will be able to do its job with fewer distractions from big unknowns.They’ll be able to look at the data in front of them to determine if rate cuts are necessary, without holding back because of the unknown economic effects of tariffs.It’s basically one less headwind for mortgage rates, along with the possibility of tighter spreads. Two positives.Ideally, what it looks like is gradual cooling while avoiding a full-blown recession, but even that can’t be ruled out. There’s also the big, beautiful bill to worry about.What we might see is the Fed resuming rate cuts, which could be preceded by falling mortgage rates, similar to what we saw last August and September.And that could get us closer to some of the 2025 rate predictions, including my own, that put the 30-year fixed mortgage closer to around 6% by year end.(photo: Aidan Jones) Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.Latest posts by Colin Robertson (see all)

Federal Reserve Gov. Adriana Kugler on Monday warned U.S. tariffs could propel higher inflation and curb economic growth. While Kugler's remarks — delivered at the International Economic Symposium in Dublin — argued that the U.S. economy had shown resilience up until now, she characterized the coming impact of tariffs as a negative supply shock that has slowed investment, could harm productivity and would soon show up in prices."In the near term, higher import costs will raise prices for both consumer goods and inputs to production," she said. "Given these expected price increases, real incomes will fall, and operating costs will rise, which will lead consumers to demand fewer final goods and services and firms to demand fewer inputs. Ultimately, I see the U.S. as likely to experience lower growth and higher inflation."Kugler's remarks came after President Donald Trump announced an initial trade deal with China that includes a 90-day pause and lowered the tariff levels on both sides.Kugler struck a somewhat cautionary tone, despite some mixed economic indicators. In a positive development, the labor market remained somewhat stable this year, adding roughly 177,000 jobs in April, maintaining a historically low 4.2% unemployment rate.Still, she said signs of a softening market are emerging. The job vacancy rate fell to 4.3% in March, and the proportion of job-openings-to-unemployed-people is lower than it was before the COVID-19 pandemic. Kugler also said she is watching forward-looking indicators closely, including an uptick in mentions of the word "layoffs" seen in the Fed's Beige Book economic report. Gross domestic product contracted at a 0.3% annual rate in the first quarter — a notable setback, she said, when one considers the economy grew 2.5% last year. Kugler noted that the decline in GDP — the standard measure of U.S. economic output — likely overstated the slowdown, in part due to a surge in imports as manufacturers rushed to beat anticipated tariff hikes. The Federal Reserve's April Beige Book also echoed that view, citing "front-loading in auto sales or other high-end goods," as overall sentiment turned more cautious. Business confidence is also softening, according to Kugler, with firms delaying investments. Inflation remains sticky, according to Kugler, with the Fed's preferred metric — the Personal Consumption Expenditures price index — up 2.3% in March and the core index rising 2.6%. Kugler cautioned that new tariffs could worsen inflation by raising input costs across sectors, even those not directly targeted. She noted while imported goods make up just 11% of GDP, tariffed items, like aluminum and steel, are critical inputs to production. Companies are already indicating they are preparing to raise prices, and a Dallas Fed survey showed 55% of Texas firms plan to pass on most or all tariff costs — of those, 26% would pass such costs onto prices immediately and 64% say they will impose price hikes within three months of tariffs, which "would suggest that price increases may be observed soon," Kugler said. These pressures, Kugler said, could erode real incomes, thus reducing consumer spending, and could also prompt businesses to scale back investment, undermining productivity and output growth. "In conversations with business contacts, I have heard that firms are paying attention to the price sensitivity of consumers across the entire catalog of items sold," she said. "And [they] may spread price increases to less price-sensitive items to avoid reducing their profit margins."Beyond tariffs, Kugler flagged rising global uncertainty — especially around trade policy — as itself another drag on demand that has tangible effects. "In times of heightened uncertainty, businesses may delay investment decisions, and consumers may increase precautionary savings and postpone discretionary purchases," Kugler said. "Firms, anticipating lower demand for their services and products, may post fewer job openings and cut back on investments to expand capacity [and] workers, therefore, may have a more difficult time finding employment, decreasing economy-wide income and aggregate demand."

Acting Consumer Financial Protection Bureau Director Russell Vought rescinded scores of guidance documents in a Federal Register notice scheduled for publication Monday.Bloomberg News The Consumer Financial Protection Bureau is radically cutting enforcement by withdrawing nearly 70 guidance documents, citing President Trump's mandate to eliminate regulations and reduce costs for businesses. In a major change for the public, the CFPB will no longer publicly disclose consumer complaint narratives or certain credit card complaint data, eliminating key information in the bureau's consumer complaint database in which consumers criticize banks and financial firms. In a 10-page document released Friday — and expected to be published in the Federal Register on Monday — Russell T. Vought, the acting CFPB director and Office of Management and Budget director, withdrew eight policy statements, seven interpretive rules, 13 advisory opinions and 39 guidance documents. "Our policy has changed," Vought wrote. "Historically, the bureau has released guidance without adequate regard for whether it would increase or decrease compliance burdens and costs."More than half of the guidance documents, interpretive rules, policy statements and advisory opinions were issued by former CFPB Director Rohit Chopra under the Biden administration. The CFPB is reducing its enforcement activities "in light of President Trump's directives to deregulate and streamline bureaucracy," Vought said.  There is "no pressing need for interpretive guidance to remain in effect," he wrote. Many of the bureau's enforcement responsibilities, Vought said, overlap with or are duplicative of other federal and state regulators, including the Federal Trade Commission, the Department of Justice and prudential financial regulators. "To reduce this overlap and mitigate the unnecessary compliance burdens posed by duplicative investigative and enforcement authority, the bureau is reducing its own enforcement to only those areas statutorily required."Pulling guidance is one step out of many that the Trump administration has taken to diminish the CFPB's power and reduce enforcement and supervision of banks and financial firms. Vought claims the CFPB's guidance is too heavy-handed and hurts companies, while opponents say that focus ignores the beneficial effect the agency's actions have had for consumers.Vought said the CFPB has a "new policy preference" that is guided by whether guidance imposes costs on companies. He cited an executive order that President Trump signed in his first term, which was later rescinded by President Biden."To the extent guidance materials or portions thereof go beyond the relevant statute or regulation, they are unlawful, undermining any reliance interest in retaining that guidance," he wrote. "Where guidance is not per se unlawful, the bureau nonetheless determines that guidance should be withdrawn and that it should be reissued only if the guidance is necessary and only if it reduces compliance burdens. The bureau determines that the benefits of this policy outweigh the cost to any purported reliance interests."  With the elimination of Chevron deference by the Supreme Court last year, none of the guidance documents or interpretations were binding, said Manny Newburger, at the law firm Barron & Newburger in Austin, Tex. Two of the policy statements that have been withdrawn are the Fair Credit Reporting Act's limited preemption of state laws for debt collectors and the authority of states to enforce the Consumer Financial Protection Act of 2010. In addition, the CFPB has withdrawn certain interpretations of Regulation F."We doubt that state legislators and regulators will change course as a result of the withdrawal of those policy statements," Newburger said.Current and former CFPB employees said the elimination of guidance is yet another step in which Republicans are trying to destroy the agency without input from Congress. It also means fewer consumers will receive redress for financial crimes because far fewer examiners and enforcement attorneys are on the beat. In a memo last month, Vought said the CFPB will only conduct enforcement of issues affecting seniors and military veterans — specifically referring to members of the military as servicemen, not women. Yet, among the guidance being pulled is a 2021 interpretive rule authorizing the CFPB to examine very large banks and credit unions to assess risks to active-duty servicemembers and their dependents for violations of the Military Lending Act. Many of the guidance documents date to the CFPB's beginning in 2011. The deregulatory effort will reduce regulations for banks, debt collectors, credit card issuers, credit reporting agencies, mortgage lenders and remittance companies. Going forward, the CFPB's leadership will conduct a review to determine if each guidance document is consistent with a relevant statute or regulation, if it is required by law, and if it imposes or reduces costs. "In many instances, this guidance has adopted interpretations that are inconsistent with the statutory text and impose compliance burdens on regulated parties outside of the strictures of notice-and-comment rulemaking," Vought said.Withdrawal, he claimed, "is not necessarily final," but the alternative of leaving the guidance documents in place while the bureau reviews each interpretation to determine its effect "risks imposing unnecessary and illegal compliance burdens in the interim."While some guidance might be reissued in the future, "the bureau does not intend to prioritize the enforcement of such guidance against parties that do not conform to the guidance during the pendency of any withdrawal."Vought is mired in a fraught legal battle with the CFPB's union, which sued him in February to stop the Trump administration from dismantling the bureau. At two separate times he has tried to fire the CFPB's staff but has been stopped by federal judges. Separately, on Friday, CFPB director-designate Jonathan McKernan was nominated to be the Treasury Department's undersecretary for domestic finance. The White House said the president intends to rescind McKernan's nomination to lead the CFPB.Sticking to the Trump administration's executive orders, Vought pulled an interpretive rule that prohibited financial firms from discriminating based on sexual orientation and gender identity under the Equal Credit Opportunity Act and Regulation B.In a major change, the CFPB will no longer publicly disclose consumer complaint narratives or certain credit card complaint data, withdrawing three policy statements from 2015, 2013 and 2012 on consumer complaints. The change benefits banks and financial institutions that have long complained that the bureau did not verify the accuracy of complaints and created reputational risk. "The complaint data and the narrative data together enables institutions to identify, understand, predict and prevent emerging risks," said Marcia Tal, founder and CEO of Tal Solution, which analyzes consumer complaint data. "Insights extracted from the voice of consumers adds to best practices."