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Navigating 2025: Key Economic Themes · Market Pulse

• 0:04
  Welcome to the first of our 2025 Marketplace Podcast.
• 0:10
  I'm your host Maria Urtubey,
• 0:12
  member of the Equifax Advisory team. As a group,
• 0:16
  we identify economic considerations and leverage data and analytics to
• 0:21
  translate into industry insights.
• 0:24
  This helps us make recommendations to support our customers during economic
• 0:29
  uncertainty and to uncover growth opportunities in the consumer
• 0:34
  credit risk space. I am pleased to welcome our panel of experts, Emmaline
• 0:40
  Aliff, Dave Sojka, Tom O'Neill,
• 0:45
  and Jesse Hardin. Welcome back.
• 0:49
  Hey, Maria. Thanks, Maria. Glad. Hey there, Maria. Welcome to 2025.
• 0:55
  Following the December, looking back at our 2024 predictions podcast.
• 1:00
  In this episode, we get a chance to redeem ourselves,
• 1:04
  or at least start on a clean slate two weeks into the new year or so.
• 1:09
  Before we dive into the conversation,
• 1:11
  though economists Justin Begley from Moody's Analytics is here to
• 1:16
  share the current macroeconomic overview.
• 1:19
  The US labor market continues to run full steam ahead. In December,
• 1:23
  firms added 256,000 new payrolls, the strongest monthly gain since March.
• 1:28
  And Besting most forecasts, once again,
• 1:30
  the mix of industries adding jobs was unsurprising.
• 1:33
  Healthcare and leisure and hospitality remained the primary drivers of new jobs.
• 1:37
  While manufacturing slide continued, December's upside to prize,
• 1:41
  closed the books on yet another strong year for the labor market.
• 1:44
  Payrolls ended 2024 with 2.23 million more jobs than in 2023.
• 1:49
  And while this marks a slowdown from 2020 threes, 3 million job gain,
• 1:53
  it aligns with the average annual pace in the three years proceeding,
• 1:57
  the pandemic recession,
• 1:58
  suggesting that the labor market remains on solid footing,
• 2:01
  the labor market will be starting 2025 in greater balance.
• 2:06
  The excess demand for labor that characterize the post pandemic economy has
• 2:10
  largely abated declining job openings,
• 2:12
  coupled with robust labor force gains from the recent surge in immigration,
• 2:16
  worked to loosen the labor market through 2024.
• 2:19
  As firms that were previously starving for workers were able to fill many open
• 2:23
  positions. As a result,
• 2:25
  there were just more than one job opening for every unemployed person in
• 2:29
  November, down from more than two vacancies for every unemployed person.
• 2:33
  At its peak in March, 2022,
• 2:36
  the economy is generally in a good place and small businesses,
• 2:39
  which account for about half of all jobs, are finally feeling it.
• 2:42
  Small business confidence has come back with a fury since the November election
• 2:47
  in December.
• 2:47
  The NFIB Small Business Optimism Index jumped to its highest in six years.
• 2:52
  Main street's outlook for the economy over the next six months surged to more
• 2:56
  than to a more than two decade high leading December's headline gain
• 3:00
  boosting their confidence that the economy will improve.
• 3:03
  Near term is the expectation that deregulation and lower taxes will help boost
• 3:08
  economic growth in the next presidential administration. However,
• 3:12
  uncertainty on Main Street remains above average as small firms around the edge
• 3:16
  of their seats awaiting more clarity about the scope and scale of Trump's
• 3:20
  promised tariffs and deportations,
• 3:22
  which could result in higher input and labor costs.
• 3:26
  Thank you, Justin.
• 3:28
  The US economy has been navigating a complex mix of challenges and
• 3:33
  course correction over the last year.
• 3:35
  And its not surprising to hear 25 is envisioned as a
• 3:40
  year of adjustment and of measured adaptation.
• 3:42
  Particularly with the upcoming change in administration.
• 3:46
  Inflation is expected to stabilize bringing further relief to consumers,
• 3:50
  but prices for some goods may continue and upward trend,
• 3:54
  particularly those affected by tariffs, the housing market is cooling,
• 3:59
  but the affordability crisis continues with mortgage interest rates
• 4:04
  roaming 7% on already high housing crisis.
• 4:08
  There are a few sticky economic themes from 2024 we identified affecting
• 4:13
  the Yes consumer this year and our predictions for 2025.
• 4:18
  So let's dive in, Emmaline,
• 4:21
  one of these being tariffs and prices addressed by Dr. Rob
• 4:26
  Wescott during Market Pulse.
• 4:28
  Would you share your thoughts with the larger audience on this topic?
• 4:32
  Yeah, definitely. Thank you for thank you for the opportunity. I love I love,
• 4:36
  you know, chatting with everyone. So as you know, as you know,
• 4:40
  we talked with many economists around this topic as well as our own perspective
• 4:44
  on understanding what are some of the biggest impacts potentially to inflation
• 4:47
  in the coming year. One of those will be tariffs. And, you know,
• 4:51
  if we think about, you know, tariffs,
• 4:52
  you know president-elect Trump described tariff as one of the most beautiful
• 4:55
  words in the dictionary, but what does that really mean? And, you know,
• 4:58
  the standpoints of you know, a tariff is, you know, the taxation of you know,
• 5:02
  goods coming in from an import based status that you know,
• 5:05
  that companies can leverage to, you know, to build whatever their you know,
• 5:08
  creating.
• 5:09
  And so there's different impacts that it can have downstream depending on you
• 5:13
  know, how those are applied and how the, how that's you know, occurs,
• 5:17
  especially depending on where the source of that those things are coming in
• 5:21
  from. And so there, you know,
• 5:23
  depending on where things land from a tariff standpoint it's either could be you
• 5:27
  know, a negative GDP impact or inflation of some kind.
• 5:31
  And so if we think about the various ways that, that, that could occur in,
• 5:35
  in discussions with with Keybridge, you know,
• 5:38
  they describe three different levels of,
• 5:40
  of that potentially occurring as posturing, light implementation,
• 5:43
  or heavy implementation. And if we consider a posturing perspective,
• 5:47
  it's like threatening the tariffs you know,
• 5:49
  with implemented implementation being slightly low with a little bit more
• 5:53
  targeted perspective towards China.
• 5:55
  And then a light implementation would be a 10% across the board and 60% against
• 5:59
  China. And a heavy implementation would be 20% across the board and, you know,
• 6:04
  upwards 600 to 200% against against China. Mm-Hmm .
• 6:07
  Now there's different impacts that can have, you know you know, for example, if,
• 6:11
  if it's just posturing,
• 6:12
  it does create a perspective that there needs to be you know,
• 6:15
  less adherence to certain supply chains from, you know,
• 6:18
  depending on where those tariffs could potentially go.
• 6:21
  And potentially even building out some things you know, more so in the,
• 6:24
  in the United States there, there, but you know,
• 6:26
  that that's a longer term perspective. So there likely would be, if,
• 6:29
  if it moves towards a more heavy implementation negative GDP impacts
• 6:34
  that could be, you know,
• 6:35
  fairly significant and resulting in some form of a recessionary period.
• 6:39
  And then also in addition to that in, you know,
• 6:43
  the inflation that could occur if if there's not any change to to address the
• 6:48
  increases in prices that the consumer would bear.
• 6:51
  Yeah, Emmaline and I, I,
• 6:52
  I think it's interesting that e even e even in your description of say
• 6:57
  the, the light implementation I,
• 7:01
  I think it's interesting to look at how that impact would be felt.
• 7:05
  It's not that we'd see, you know, homogenous, you know,
• 7:10
  increases in prices across the board.
• 7:12
  A lot of people might not feel any change depending upon what's,
• 7:17
  what's being tariffed and, and what is, you know, what,
• 7:19
  what those consumers are are looking to buy,
• 7:22
  where others may feel a deep gouge, you know, so, so it's,
• 7:26
  it'll be interesting to see how the implementation of it comes out.
• 7:29
  And that's just in terms of sheer volume and and size of the tariffs,
• 7:35
  but where those tariffs are. Yeah. And not just by country, but you know,
• 7:40
  by industry, by sector, by consumer goods or industrial goods and whatnot.
• 7:45
  I, yeah, I hear, I hear both of what you're saying.
• 7:47
  I think the most interesting thing though,
• 7:48
  to me is there there was talk last week of now having an an
• 7:53
  external revenue service.
• 7:55
  So Internal Revenue Service collects for internal you know, internal taxes,
• 8:00
  external revenue services is gonna collect these tariffs. And just maybe wonder,
• 8:04
  so does, does do we implement the external revenue service?
• 8:08
  Then Doge turns right around and cuts it. That, that's,
• 8:11
  that's what's interesting to me.
• 8:12
  , well I'll pull on your Doge thread. Will,
• 8:15
  will the text form be simpler for the external revenue services as opposed to
• 8:19
  the internal one?
• 8:19
  Yeah, that's the question.
• 8:22
  All.
• 8:22
  Great. And,
• 8:23
  and we're not even touching on the retaliation or the effects on foreign policy,
• 8:27
  right. Since we're keeping it domestic. Absolutely. But yeah. Yeah.
• 8:30
  Very good point, Maria.
• 8:31
  Yep. Yeah, sorry. And relating to foreign policy,
• 8:35
  I know Dave you've been sharing with US immigration reform
• 8:40
  expectations, key focus for incoming President Trump. What,
• 8:43
  what are you expecting on this front in 2025?
• 8:48
  Yeah, thanks, Maria. So, you know,
• 8:50
  there's that initial reaction to President's Trump statement around mass
• 8:55
  deportation, and I'll go back to what Emily just talked about, posturing.
• 8:59
  So is it posturing? So are,
• 9:02
  are we really gonna see mass deportation or is there a more nuanced approach
• 9:07
  where border security is addressed,
• 9:11
  but there's still that welcoming of high highly skilled workers that
• 9:16
  allow the US economy to thrive?
• 9:20
  I recently read a paper,
• 9:22
  I think it was a couple days ago from the Economic Innovation group and it
• 9:27
  really went into kind of the nuance around the highly skilled worker and the
• 9:31
  benefits to the US economy in terms of even seeing faster
• 9:37
  and higher wage growth for native born CI citizens and actually improving the
• 9:42
  deficit. You know,
• 9:44
  we're not gonna belabor whether that's an accurate statement or not.
• 9:49
  I know I've seen Liz Lindsay sorry.
• 9:51
  There was an article in the journal from one of our, our,
• 9:54
  our sitting senators around immigration and you know,
• 9:58
  addressing some of the negatives,
• 9:59
  but the positive was around the H one B visa program and how important
• 10:05
  that is. And so, and,
• 10:06
  and actually kind of extolling an expansion a
• 10:11
  streamlining,
• 10:12
  if you will to increase the amount of visas that we
• 10:16
  currently accept.
• 10:20
  Dave, the, the thing that strikes me about this whole topic in, in general, I,
• 10:23
  I, I like the, that you, you mentioned sort of the, the positive, you know the,
• 10:28
  the H one level, you know, visa.
• 10:31
  But I think on the other end of the spectrum, you have, you know,
• 10:35
  the consequences of, of, of the impacts on, on labor essentially. And,
• 10:40
  and you know, Maria, you mentioned the, the stickiness of the affordability,
• 10:45
  you know, theme that we've been struggling with for a couple years now, and,
• 10:49
  you know, continue to struggle well in, you know, into 2025
• 10:54
  deportations on any scale are going to, you know, just exasperate that,
• 10:59
  you know, if you think about, you know, the, the costs of a lot of what,
• 11:02
  you know, people are complaining about the price of eggs now,
• 11:05
  that's not gonna help. Yep.
• 11:07
  Yeah. Your culture services.
• 11:09
  Mm-Hmm . Yeah.
• 11:11
  That's, that's one of my biggest concerns is around the, the, the farming side.
• 11:13
  You know, if we're, you know, 'cause the,
• 11:15
  the price of eggs has been such a heavy topic with the heavy percent of,
• 11:19
  was it you know, 40 something,
• 11:20
  50 something percent of farm workers are you know,
• 11:24
  believe to have some form of un undocumented nature. So it's,
• 11:28
  it just becomes a little tricky.
• 11:29
  And absolutely immigration reform is something that's that does need to occur.
• 11:33
  Yeah.
• 11:34
  It's also when you look too at the Emily, the, the,
• 11:37
  the format that you kind of put on on tariffs. I mean, we, we,
• 11:41
  we do think about the, the notion that there is a lot of posturing here as well.
• 11:46
  The, you know, the question is is there,
• 11:49
  is there strength in posturing above and beyond then the capability of actually
• 11:54
  implementing what we've, what we've heard the administration say?
• 11:57
  So it will be interesting to see how, how closely you know, the,
• 12:01
  the threat follows to the action.
• 12:04
  Yeah.
• 12:04
  So to kind of take these points and kind of to bring it home is really I'll
• 12:10
  address kind of where I think the, you know, the impact might be felt on the,
• 12:14
  on the US average US citizen side or the consumer as we try to avoid
• 12:19
  to classify all all Americans.
• 12:23
  So is there confidence you know, people will be, are wondering,
• 12:28
  you know, can I stay in this country? Businesses,
• 12:33
  , as you just talked about you know,
• 12:35
  agriculture even on the housing side,
• 12:38
  a lot of the work that's done in those industries is really on the
• 12:44
  you know, the potentially Imma, you know, illegal immigrant population.
• 12:51
  So we have a housing shortage. We have, we need more houses built,
• 12:55
  and yet we potentially have a, a, a a damage or,
• 12:59
  or a a shock to the workers that that would facilitate building more houses.
• 13:04
  And so you know, there's a lot to,
• 13:08
  to really think about with that with that impact
• 13:13
  on, you know, on consumers as well as businesses. So, you know,
• 13:17
  where we go remains to be seen.
• 13:21
  Thank you, Dave. And maybe bringing it back to the domestic scenario, Jesse,
• 13:26
  you highlighted rate cuts in your predictions last year.
• 13:30
  What are you expecting for this year?
• 13:34
  Yeah, thanks, Maria. I probably should say that I'm expecting, you know,
• 13:38
  something just to, to leave it really vague, but way to go.
• 13:42
  Out on a limb there, Justin. That's right.
• 13:43
  Right. Yeah.
• 13:44
  It will either change or not. Yeah.
• 13:46
  Yeah. They, they will, they will, they will change.
• 13:50
  There is a glass.
• 13:51
  No, I think, you know.
• 13:52
  .
• 13:52
  2025, you know, I personally, I feel like it's gonna be a good year.
• 13:57
  Certainly, I think we're still seeing growth in the economy. You know,
• 14:00
  we're seeing job creation, good wage gains, low unemployment,
• 14:05
  falling prices. So that's, that's all the good stuff.
• 14:08
  I think what that's what's gonna happen is when you think of Fed policy,
• 14:12
  the fed monetary policy is really gonna follow what those numbers say.
• 14:16
  But then we also have kind of an unexpected component,
• 14:19
  and those are really obviously hard to hard to forecast.
• 14:23
  Those are gonna be things like a hot read on an economic print that comes
• 14:27
  through.
• 14:27
  Think of what we saw last week with the job growth numbers coming in higher.
• 14:32
  I think we also would expect to see some economic challenge from the,
• 14:36
  the things we just talked about. Also things like fire,
• 14:39
  think about the fires in, in the west and the, you know, the,
• 14:42
  the fallout from that cyber attacks on our banking systems, et cetera. So,
• 14:47
  you know, we can't, we can't really forecast or predict what,
• 14:51
  what those unexpected events will do to policy decisions from the Fed.
• 14:56
  Having said that, though, I think that, you know, we saw in 2024,
• 15:00
  there were significant policy cut rate cuts via policy
• 15:05
  and, and maybe more than what some thoughts.
• 15:08
  So I think as I think to this year,
• 15:11
  I think we're gonna see that at least what my baseline case would be is that
• 15:14
  we're not gonna see any rate cuts. Or if we do we'll,
• 15:18
  we'll see definitely rate cuts in, in the longer term, you know,
• 15:22
  probably not any rate cuts in the near term.
• 15:24
  And I think that's just based on the,
• 15:26
  the Fed needing to see kind of more data to really get a better sense of,
• 15:31
  of true direction.
• 15:32
  Hey, Jesse,
• 15:33
  with the recent jobs and the was it the producer
• 15:38
  price index that came out that was, yeah, PPI slightly high, but not,
• 15:41
  but lower than expected, you know, does that change, you know,
• 15:46
  your thoughts on that in terms of, has the Fed actually reached its target yet?
• 15:52
  Yeah, I mean, I think, you know,
• 15:54
  I think with and we saw the CPI number come out as well yesterday,
• 15:57
  I think with the you know,
• 16:01
  you can always kind of dissect the report to figure out, you know,
• 16:05
  based on your predictions, what data's gonna support you. I think overall,
• 16:10
  we're still seeing that prices are moving in the right direction.
• 16:13
  But I think the Fed's gonna be more cautious this year. And, and I,
• 16:17
  and I think as a result of that, I just, I don't think we're gonna see,
• 16:20
  you know,
• 16:21
  broad scale cuts because the hardest thing to do would then to be turn around
• 16:25
  and see inflation start to increase again,
• 16:28
  maybe through these policies that we're talking about.
• 16:30
  And then the Fed has to react with rate hikes. You know, I, I mean,
• 16:35
  with the Biden administration, I can't imagine what the hikes would be,
• 16:38
  let alone with now the Trump administration, you know, thinking about just the,
• 16:41
  the interplay between between the Fed and, and the executive branch.
• 16:46
  So I think that could, you know, that could also weigh in as well.
• 16:49
  I think they're gonna wanna stay more cautious especially if they wanna keep
• 16:53
  their job.
• 16:54
  Yeah. The the couple things that Dave and I just talked about, you know,
• 16:57
  with respect to price increases,
• 17:00
  price increases and inflation is what drives you know,
• 17:03
  changes in rates to go higher. And,
• 17:06
  and so it really depends on what's gonna happen downstream with the other
• 17:10
  peripheral aspects that would have an impact on prices. And,
• 17:14
  and it could impact things from a positive standpoint or negative standpoint
• 17:17
  with respect to those prices. And I think where you, I,
• 17:21
  I really liked how you frame that, Jesse,
• 17:22
  around the a little more cautious because anytime there is uncertainty,
• 17:27
  there's less action and, and less action. It's there, there. And,
• 17:31
  and by some regards, like if we think about these things as being posturing,
• 17:33
  light,
• 17:34
  imitation or heavy there might even be some form of forced uncertainty to be
• 17:38
  able to like, to test the waters to see what,
• 17:41
  what would be the best pathway forward.
• 17:43
  Yeah. And I might close out just by saying,
• 17:47
  I think in terms of what I'm looking for, then you know,
• 17:50
  I'm gonna look for things like wage increases. Where,
• 17:54
  where are wages this year coming up? You know,
• 17:57
  is there more pressure because workers are making more money and they have more
• 18:00
  options and job switching? I'm also gonna look at, you know,
• 18:05
  what's happening with the credit perspective in the economy with delinquency,
• 18:09
  you know, so are consumers strong? Are they you know,
• 18:13
  are we seeing a higher delinquency that could, you know,
• 18:15
  potentially ripple through the economy? So,
• 18:18
  so kind of also looking at those more consumer impacts and you know, and,
• 18:23
  and understanding where the fed,
• 18:25
  because the fed's gonna be looking at all that as well.
• 18:27
  So kind of understanding where their, their thinking would be.
• 18:31
  Thank you, Jesse.
• 18:33
  Lemme ask, let me ask you another aspect of that,
• 18:35
  and maybe this even applies to what Dave and,
• 18:39
  and Emily and also spoke about, but what,
• 18:43
  what are your expectations around the impacts on consumer confidence, you know,
• 18:48
  for any, any change in,
• 18:52
  in rates or lack thereof? Would that be a, a downward pressure?
• 18:57
  Do you feel that there's,
• 18:58
  there's a maybe a sense on the consumer sentiment side that,
• 19:02
  that we're in a good place and, and, you know, holding still as,
• 19:07
  as you were mentioning, or or being more cautious wouldn't necessarily be,
• 19:12
  you know, a disappointment.
• 19:13
  And I guess the same would hold true for either of the other topics that were,
• 19:17
  you know, that Emily talking about tariffs and, and Dave on,
• 19:21
  on immigration. If, if these things hit, you know,
• 19:24
  is that an area where we could see a, a pretty sizable change?
• 19:29
  Well, I mean, I would say you, you started out saying consumer confidence,
• 19:32
  and I would say, you know, I certainly use that as a directional indicator.
• 19:37
  I don't think though,
• 19:38
  that we would see the Fed using something like consumer confidence as a
• 19:42
  barometer for making a move. And it's simply because there's,
• 19:45
  there is noise in that data, right? You know, you can,
• 19:47
  you can actually look at that data and if you graft it over the last, you know,
• 19:52
  20 to 30 years, you can actually see when elections happen because, you know,
• 19:56
  there's a you know, there's a bias towards who's, you know,
• 20:00
  whose party's in power. I do think, though, I mean,
• 20:03
  overall consumer confidence does indicate kind of the direction that the
• 20:07
  economy is going. And so, you know,
• 20:09
  as consumers feel more burdened with things like service level inflation
• 20:15
  those, those numbers just not coming down, I,
• 20:17
  I think that's where you're gonna see, you know, the Fed taking those,
• 20:20
  those types of movements into consideration. You know,
• 20:22
  are we seeing wage growth that's you know,
• 20:25
  that's maybe beyond what was expected, in which case you're, you know,
• 20:28
  you're seeing more pressure on on those inflation numbers. And same with what,
• 20:33
  what Emily said with tariffs and Dave, you know, said with immigration.
• 20:38
  I mean,
• 20:38
  those are gonna be obviously factors that play into overall confidence and,
• 20:43
  and, you know, and, and then you know, driving the, the,
• 20:46
  the policy that the Fed is is gonna put forward.
• 20:50
  Thank you, Jesse. And I know we have so, so much time to,
• 20:55
  to address, we still have a, a hot topic,
• 20:58
  which is housing Tom with us mortgage debt at almost 13 trillion,
• 21:02
  almost 74% of the total consumer debt as of November of last year.
• 21:07
  What are you expecting specific to, to housing in 2025?
• 21:11
  Yeah, it's, it, it,
• 21:13
  it's probably appropriate that we have this one following all of the other
• 21:16
  topics because all of the other topics impact, yeah. What the,
• 21:21
  the housing market's gonna be. And and, and as the,
• 21:25
  the father of, of a, you know,
• 21:28
  child who is looking to make his first housing purchase in the,
• 21:31
  the coming months, unfortunately, I can't say that it's a great environment for,
• 21:36
  for him to do so. We're,
• 21:39
  we're still slogging along in, in the housing department, and,
• 21:43
  and it's probably going to continue the, the same set of culprits, you know,
• 21:47
  high housing prices driven predominantly by, you know, short inventories
• 21:54
  you know, high, you know mortgage rates, you know, you know,
• 21:58
  making it even more difficult. It's, it's something that's impacting any
• 22:04
  consumer that's, that's in the home buying market,
• 22:07
  but particularly the, the younger generations. Yeah. For obvious reasons.
• 22:13
  A lot of the older generations, such as myself, we've, we've been in our homes,
• 22:17
  you know, we've built up equity in there. We, you know, even if we are in the,
• 22:21
  the market for a new house,
• 22:22
  we could use that equity and our savings and the stuff that we've built up over
• 22:26
  time to help offset some of the,
• 22:30
  those higher costs and the,
• 22:32
  the overall affordability of going into the housing market.
• 22:34
  The younger generations don't have that. They, and,
• 22:37
  and they're still wanting to, to, you know,
• 22:40
  to make that first housing purchase. And we've seen in the,
• 22:44
  the data that the average mortgage balance for,
• 22:47
  for those younger generations is rising at a much higher rate than any other
• 22:51
  generations. You know, simply because, you know,
• 22:53
  they're entering the market at a, at a pretty nasty time to be doing. So.
• 22:59
  I was hearing yesterday,
• 23:00
  even on the positive side this is driving alternatives and innovation
• 23:05
  on the rent to own and the shared housing market. Mm-Hmm . So some,
• 23:09
  you know, variation of those struggles, right?
• 23:11
  What are other alternatives might surface, right, right. As a result.
• 23:15
  Yeah, you certainly see, see the innovation, you know,
• 23:18
  as people look for alternatives. And, and,
• 23:22
  and I'd love to say that it's a temporary you know, fix until the,
• 23:27
  the, the conditions improve. But as we've been talking about
• 23:32
  here, there's, there,
• 23:36
  there are completely negative, you know, there are some things that might,
• 23:40
  you know, drive the, the housing conditions in a, in a better way, you know,
• 23:44
  as including stuff that the incoming administration has has,
• 23:49
  you know, mentioned is a, is a priority, tax cuts, you know,
• 23:53
  easing of regulatory, you know, conditions. Those may, you know, be a,
• 23:57
  a positive boost for builders to, you know, to go out there and, and, you know,
• 24:02
  take the risk of, of building more. But on the flip side,
• 24:06
  it could just as easily have the negative impacts of some of the policies being
• 24:09
  discussed, you know, some of which we've been talking about here. You know,
• 24:12
  if we've got, you know, a ding to the, the, the labor, you know, availability,
• 24:17
  that's not gonna help, you know, ease the inventory.
• 24:20
  If we increase, you know, tariffs, you know,
• 24:23
  you might not associate that directly, but if, you know,
• 24:26
  increased tariffs have an impact on the materials that go into building,
• 24:31
  you know and, and maintenance of, of housing, that's gonna be felt as well.
• 24:35
  So it's, it's definitely I I do think that,
• 24:39
  that there will be some breaking up of the, the log jam, but it's,
• 24:43
  it's still gonna be slow.
• 24:46
  Yeah. I, I think, Tom, one of the things I was actually thinking about as a,
• 24:50
  as a now home purchaser in in this en environment,
• 24:54
  I'm actually going through that process as well, selling and buying you know,
• 24:58
  obviously rates are, I, I'm,
• 25:00
  I'm kind of blown away working with mortgage lenders right now,
• 25:03
  just seeing where the rates are, you know,
• 25:05
  'cause my frame of reference was refinancing in the, the boom Yeah.
• 25:09
  The refinanced boom after.
• 25:10
  We were spoiled, weren't we?
• 25:11
  Yeah, yeah. You know, I mean, I I, I dare to say like,
• 25:13
  I have a one in front of my my rate right now, but
• 25:18
  I think one of the things that I, you know, I kind of think about is the,
• 25:22
  right now the, you know, the, the Fed as we just,
• 25:25
  or as I talked about the Fed had cut rates last year,
• 25:27
  but we really didn't see any of that translate into movement on rates.
• 25:31
  And that's has a lot to do with the, the 10 year treasuries and the premiums,
• 25:36
  right. You know, associated with those. I do hope, you know, as,
• 25:38
  as the new administration comes in and maybe things settle a little bit,
• 25:42
  we'll see that that premium, that yield premium, you know, starts to, to fall.
• 25:47
  And maybe we do see you know,
• 25:49
  we see a reduction in mortgage rates just kind of naturally as the as the
• 25:54
  unknown of the new administration starts to work itself out, you know, so that,
• 25:58
  you know, that could help as well as, as we think of, you know, direction,
• 26:01
  even if we don't see large scale rate decreases from the Fed in, you know,
• 26:05
  in 2025, that yield spread being a little bit smaller might help.
• 26:10
  Thank you for all sharing all those thoughts. Before we close out,
• 26:14
  I do want to recap such,
• 26:17
  so similar to the lighting round that Jesse went through with our prediction
• 26:22
  leveling set for 24,
• 26:25
  if you could in a summary summarized version
• 26:30
  share your predictions for 25. Let's get started with you, Tom.
• 26:35
  I'll go first. Yeah. Do you want Tom.
• 26:36
  Tom to go first? Yeah, sure. I'll, I'll go first. Yeah, because I,
• 26:40
  I just sort of,
• 26:41
  I kind of obliquely re referred to it is that my safe
• 26:46
  prediction is that the, the,
• 26:47
  the mortgage market will continue to be the housing market and mortgage market
• 26:52
  will, will both be con continuing to just sort of slog through 2025.
• 26:57
  My, my little more daring prediction will be that
• 27:03
  Gen Z will,
• 27:04
  will continue to have an even bigger mark on its head from the other
• 27:08
  generations that,
• 27:09
  that they'll be painted as lazy and not moving out of their parents' ba
• 27:14
  basements when in reality it's because they just can't afford to.
• 27:18
  Wow. I, I have a different take similar to yours.
• 27:22
  Affordability for sure will be limited,
• 27:25
  and I don't see the housing market
• 27:30
  or, or the help as you said,
• 27:31
  towards younger generations going anywhere until prices.
• 27:35
  It's not so much the interest rate, but prices decrease.
• 27:38
  And I'm positive or or optimistic on the Gen ZI think they will teach us a
• 27:42
  lesson. They're, they're way more focused than we, than we envision.
• 27:47
  And they, they will surprise us. I think that that.
• 27:50
  Will, I, I share that opinion. Maria, I am optimistic about the generation,
• 27:55
  regardless of, you know, their attitude towards avocado toast, ,
• 28:00
  look at two.
• 28:00
  Glass half full peoples. I love it.
• 28:04
  Emmaline.
• 28:05
  I personally like avocado toast too, so I take offense to that.
• 28:08
  .
• 28:10
  But the, I I do think very.
• 28:11
  California.
• 28:12
  Yeah. I,
• 28:12
  I do think that affordability will likely be one of the higher challenges.
• 28:16
  'cause We, you know, of all the things we talked about, price increases,
• 28:19
  were likely going to be, you know,
• 28:20
  some of the impact that we could potentially see even with those uncertainties.
• 28:24
  Like whatever un uncertainty could happen, I, but with the affordability,
• 28:28
  I do think it's gonna have some level of nuance associated with it,
• 28:31
  specifically that nuance will likely have a further you know,
• 28:35
  spreading out of the KS shaped economy we've been talking about,
• 28:37
  because we know that delinquencies have been on the rise and, you know, auto,
• 28:41
  for example, are,
• 28:42
  is higher at a delinquency level than it was during the during the great
• 28:46
  Recession, right? You know, however, auto delinquencies,
• 28:49
  when we look at payment hierarchy it is still at a highest,
• 28:53
  one of the highest likelihood of getting paid. So if someone is,
• 28:56
  is moving at a place where they're delinquent on their auto and it's higher than
• 28:59
  the great recession, that means they haven't paid their other debts first.
• 29:03
  So there's like, there's, there's gonna be continued separation.
• 29:05
  So those people who have been able to invest in the stock market,
• 29:09
  who have you know, who have like a, a home, who have all those things,
• 29:14
  who have the financial literacy will continue to, to thrive,
• 29:17
  where those consumers who have been struggling may struggle more.
• 29:22
  Thank you. Dave or Jesse?
• 29:26
  I, I, okay, go ahead, Dave. I'll, I'm close this up.
• 29:28
  Because unlike, yeah,
• 29:29
  because unlike you there's a glass I'm gonna make a bold prediction.
• 29:35
  So we're recapping on the immigration job side,
• 29:40
  my bold prediction. There will be a bipartisan bill passed
• 29:46
  this year that secures the border,
• 29:50
  while at the same time a lot expanding the H one B visa program.
• 29:57
  That is bold.
• 29:59
  Yeah. Yeah. It's, it's bold.
• 29:59
  It's bold to say bold and bipartisan in the same statement. I.
• 30:03
  Bought it. .
• 30:04
  . All right, I'll close this out. So yeah,
• 30:08
  I know you know, I, I kind of, I kind of hit on it when I, when I spoke before,
• 30:12
  but I think what we're, what,
• 30:14
  what my baseline would be from a rate standpoint is that we're gonna see
• 30:19
  maybe one cut as a, as a baseline.
• 30:22
  And then my bold prediction would be that there,
• 30:25
  there could be rumblings of rate hike at at least a rate hike,
• 30:28
  and it's going to, it's gonna cause chaos. Having said that, though,
• 30:32
  I do wanna review that.
• 30:33
  There were two things that I think came to mind as I was just listening to
• 30:37
  everybody talk about their, their different subjects. You know,
• 30:40
  I spoke of unexpected impacts to monetary, fiscal,
• 30:45
  monetary policy. One that I,
• 30:48
  that I do wanna shine light on when we think of federal student loans. So we,
• 30:53
  we do know that delinquencies are gonna be reported now on those student loans.
• 30:57
  They're, you know, they're coming through the you know, sometime in the,
• 31:00
  the late early February to, to mid-February timeframe. And you know,
• 31:06
  as I said before,
• 31:07
  that's what I think we can't predict necessarily in terms of
• 31:12
  building that through to, to what happens with rates.
• 31:14
  But something like you know, a higher level of student loans and the,
• 31:18
  and the turmoil that that causes, like that, that's I think where you know,
• 31:23
  the Fed may have to pivot from that, you know, from that one cut that I,
• 31:26
  that I mentioned. The other thing I would mention, I,
• 31:28
  we've all kind of talked about affordability, but you know,
• 31:31
  one that comes to mind is insurance right now, you know,
• 31:34
  certainly housing insurance on housing, it's it's, it's,
• 31:38
  it was already challenged let alone now what happens with some of the, the,
• 31:43
  you know, tragedy we've seen on the West coast. So, you know, just,
• 31:46
  just kind of throw that out as when we think of unexpected events, they're,
• 31:50
  they're gonna come up. We know they are. And and, and, you know,
• 31:54
  we just have to kind of size 'em, see what the impact is, and,
• 31:56
  and then figure out how that impacts both the consumer and you know,
• 32:00
  and the economy.
• 32:03
  Thank you, Jesse.
• 32:04
  You wrapped us up very nicely with other key topics to keep in mind.
• 32:10
  Thank you again, Jesse Davely and of course, Tom for joining me today.
• 32:15
  To our listeners, I hope you enjoyed today's topic.
• 32:19
  How do these predictions align with your expectations for the year and what are
• 32:23
  your predictions for 2025? If, if you would like to share these with us,
• 32:28
  with us, or have questions or suggestions for future podcasts,
• 32:32
  please reach out to us at risk
• 32:38
  advisors@equifax.com. We would love to hear from you.