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Today on Real Estate Backstage, Trump presses pause on the tariffs for 90 days with everyone except China … We have a positive inflation and jobs reports for March … Fannie Mae has fired over 100 employees for alleged fraud … And Compass pushes forward with its private listing network in direct defiance of MLS rules.
90-day tariff pause
According to ConnectCRE:
“Mere hours after imposing a range of tariffs on global trade partners, President Trump, via a Truth Social post, declared a 90-day pause on the “reciprocal” import duties, effective immediately, while raising tariffs on China to 125%. This followed his April 2 “Liberation Day” tariff plan, which set a 10% baseline tariff on all import and higher reciprocal tariffs on about 60 nations, including a 104% total on China (combining prior duties). The pause lowers the reciprocal rate to 10% for non-retaliating countries, China’s tariff, however, jumped from 104% to 125% due to its 84% retaliation (up from 34%), effective April 10.
U.S. equities surged after the announcement, with the major indices up between 7% and 10%. This reversed a $6 trillion loss in U.S. stocks since April 2. The rally reflected relief from a perceived de-escalation, though China’s exclusion is likely to keep tensions high. Asian markets like Japan’s Nikkei (down 3.5%) and Hong Kong’s Hang Seng (down 4%) had fallen sharply earlier, but U.S. optimism hints at a global rebound at their open.
Government bond yields rose slightly, with the U.S. 10-year Treasury jumping to 4.40% from 4.27%”
(Source: ConnectCRE.com)
According to the Wall Street Journal:
“It took a week for the plunge in the stock and bond markets—along with a sustained campaign by executives, lawmakers, lobbyists and foreign leaders—to prompt Trump to roll back for 90 days a major element of his sweeping tariff plan …
He relied on his instincts to change course as he watched the bond market tank and listened to business leaders including JPMorgan Chase CEO Jamie Dimon express fears of a recession. The episode was classic Trump: He took a drastic action, closely tracked the reaction, kept advisers and allies guessing and then changed course.
In this case, the extraordinary reversal was announced via Trump’s social-media platform just hours after so-called reciprocal tariffs officially went into effect. He tapped out the post in the Oval Office as he sat with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.
Shortly after Trump published his post, as markets rose, Bessent stood outside the entrance to the West Wing and explained that the move to pause some of the tariffs was discussed Sunday when the two men met. ‘He and I had a long talk,’ Bessent said before a crowd of reporters. ‘This was his strategy all along.’
Bessent was flooded with worried calls from Wall Street over the weekend and felt strongly he had to persuade Trump that a pause was needed. It wouldn’t be a capitulation, Bessent argued, because they were going to have so many deals.
He revealed little publicly about why the president and his team waited until Wednesday afternoon to enact it, with Trump saying that he decided on the move Wednesday morning. Bessent said more than 75 countries have reached out seeking a deal to ease tariffs, with Japan ‘at the front of the queue.’
One key to the change: Trump’s decision to give Bessent more authority within his team of trade advisers, people close to the discussions said, along with the talks on Sunday. Bessent flew down Sunday to Florida and afterward was authorized to make comments publicly about deals, which heartened many people close to Trump who believed the Treasury secretary could find an exit ramp. When the two men returned to Washington together Sunday on Air Force One, Bessent encouraged Trump to focus on negotiations, according to a person familiar with the conversation.”
(Source: wsj.com)
Inflation Rate Fell In March
According to the Wall Street Journal:
“Consumer prices declined month-over-month in March for the first time in nearly five years, a welcome development for inflation-weary families … The consumer-price index fell a seasonally adjusted 0.1% in March, the Labor Department said Thursday, the first time it recorded a month-over-month decline since May 2020. The drop was unexpected: Economists surveyed by The Wall Street Journal had forecast a 0.1% rise.
Year-over-year inflation cooled sharply to a 2.4% increase in the CPI, below the 2.6% rise that economists expected. A steep decline in gasoline prices last month helped pull that number lower.
Normally, a slowdown in year-over-year price increases would be welcome news for consumers, who have faced years of high inflation, and the Federal Reserve, which has been struggling to bring down price pressures. But this time, it will be hard for investors, policymakers and businesses to read too much into the March data.
President Trump’s ‘Liberation Day’ announcement of sweeping new tariffs didn’t happen until April 2, which means their direct effects won’t show up until the next consumer-price report a month from now.
‘It’s good news for the Fed, but the data seems stale,’ said U.S. Bank chief economist Beth Ann Bovino.
Hotel prices, airline fares and gasoline prices all dropped sharply over the month, a sign that people are canceling their travel plans—one of the first things to go when consumers get nervous … Meantime, consumers’ grocery and restaurant bills continued to rise; food prices increased 0.4% last month. Egg prices rose nearly 6% in March, and are up 60% from a year earlier.
Prices excluding food and energy categories—the so-called core measure economists watch in an effort to better capture inflation’s underlying trend—rose 2.8% on the year, below forecasts for a 3% increase. That was the smallest increase in the core measure since March 2021.”
(Source: wsj.com)
March Jobs Report
“Nonfarm payrolls for March beat estimates with 228,000 jobs added, according to data published by the Bureau of Labor Statistics, versus the estimate of 140,000. The unemployment rate ticked up to 4.2%, a three-year high, from 4.1%. Employers added 117,000 in February, which was revised from 151,000.
Average hourly earnings increased by 0.3% in March, aligning with both the consensus estimate and the rise observed in February. However, on a year-over-year basis, wage growth decelerated to 3.8%, down from 4.0% in February and falling short of the expected 4.0%.
Meanwhile, the labor force participation rate rose slightly to 62.5%, up 0.1 percentage point from February’s 62.4%.
Federal employment took another hit in March, shedding 4,000 workers. This decline comes on the heels of an even steeper drop in February, when 11,000 positions vanished. However, these numbers might not reveal the full extent of the job cuts still rippling through the federal workforce.
Economists predicted a decline of 10,000 to 15,000 federal jobs in March, yet the Bureau of Labor Statistics clarified on Friday that employees on paid leave or receiving ongoing severance pay are still counted as employed.
The employment data, collected before the Trump administration’s latest tariff increases, still reveal how employers reacted to earlier tariffs imposed on China, Canada, and Mexico, alongside federal layoffs and spending cuts.
Considering the current labor market conditions and persistent inflation above 2%, the Federal Reserve is not expected to cut interest rates at their May meeting.”
(Source: ConnectCRE.com)
Fannie Mae fired over 100 employees, citing fraud
According to RISMedia:
“On Tues. April 8, government sponsored-enterprise Fannie Mae announced that over the past few weeks, it had fired over 100 employees due to fraud, including mortgage fraud, against the company. The announcement did not elaborate on the specifics of what the claimed fraud was.
William J. Pulte, director of the Federal Housing Finance Agency (FHFA), who was confirmed to the position on March 13, issued a statement following the announcement. Pulte is also chairman of the board of directors of Fannie Mae and Freddie Mac.
‘In President Trump’s housing market, there is no room for fraud, mortgage fraud or any other deceitful act that can jeopardize the safety and soundness of the housing industry. Since my swearing-in, we fired over 100 employees from Fannie Mae who we caught engaging in unethical conduct, including facilitating fraud, against our great company. Anyone who commits fraud against Fannie Mae does so against the American people,’ said Pulte.
‘I would like to thank Director Pulte for his empowering of Fannie Mae to root out unethical conduct, including anyone facilitating fraud. We hold our employees to the highest standards, and we will continue to do so,’ added Priscilla Almodovar, president and CEO of Fannie Mae, in the statement …
The fraud is described as a misuse of Fannie Mae’s matching gifts program, where the company will match employees’ eligible donations to causes/organizations up to $5,000. The fired employees allegedly colluded with organizations … to misuse Fannie Mae funds for personal gain.”
(Source: RISMedia.com)
Compass defies NWMLS rules over private listings
According to Real Estate News:
“The war over private listings in Washington state is quickly escalating as Compass appears to have instructed its agents to disobey local MLS rules prohibiting pre-marketing of homes, while also seeking to build a database of seller clients who could potentially take legal action against Northwest Multiple Listing Service.
But the campaign started with a blitz of private exclusives. Since March 20, Compass CEO Robert Reffkin has publicly highlighted a number of agents in the Seattle area who were the first to participate in the brokerage’s three-phase marketing strategy and list their sellers’ homes as a Compass Private Exclusive.
The first was Sam Cunningham, who Reffkin applauded via Instagram and LinkedIn. Speaking to Real Estate News about Compass’ private listings push in the Seattle area, Cunningham said it was an effort that had come from the top down and was strategically coordinated as a test pilot.
Cunningham, who launched the first Compass Private Exclusive in Washington state, said ‘the reality is that pre-marketing is going to happen anyway.’ In fact, he noted, it’s already happening: ‘20% of our sales in Washington State happen off market.’
‘So those sales are happening between Realtors who are already doing this. What I’m talking about is like prohibition — everybody’s already drinking, so why don’t we make it legal?’
Compass’ pre-marketing blitz in the Seattle area was likely intended to force NWMLS to take action — by either penalizing Compass agents en masse for breaking its rules, or by making an exception to those rules. Compass leadership told local agents participating in the effort that the brokerage would ‘remain committed,’ indefinitely, to covering any fines from NWMLS resulting from the private listing push, Real Estate News learned and Cunningham confirmed.
Cunningham said the fine for pre-marketing a listing could be as steep as $5,000, but he wasn’t contacted or penalized by NWMLS for pre-marketing a home. After listing his seller’s property for five days as a Private Exclusive, he ended up putting it on the open market, and the home went under contract shortly after going on the MLS …
NWMLS declined to comment on this story, but previously published an open letter on March 28 reiterating its position on pre-marketing, arguing that such strategies are ‘misguided’ and ‘exclusionary.’ …
NWMLS reportedly warned Compass agents not to post private listings after March 28, but it’s unclear if the organization will ultimately decide to issue fines. Either way, Compass is likely to continue its pre-marketing strategy.”
(Source: RealEstateNews.com)
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