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Welcome to the first of our
2025 Marketplace Podcast.

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I'm your host Maria Urtubey,

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member of the Equifax
Advisory team. As a group,

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we identify economic considerations
and leverage data and analytics to

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translate into industry insights.

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This helps us make recommendations to
support our customers during economic

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uncertainty and to uncover growth
opportunities in the consumer

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credit risk space. I am pleased to
welcome our panel of experts, Emmaline

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Aliff, Dave Sojka, Tom O'Neill,

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and Jesse Hardin. Welcome back.

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Hey, Maria. Thanks, Maria. Glad.
Hey there, Maria. Welcome to 2025.

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Following the December, looking back
at our 2024 predictions podcast.

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In this episode, we get a
chance to redeem ourselves,

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or at least start on a clean slate
two weeks into the new year or so.

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Before we dive into the conversation,

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though economists Justin Begley
from Moody's Analytics is here to

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share the current macroeconomic overview.

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The US labor market continues to
run full steam ahead. In December,

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firms added 256,000 new payrolls, the
strongest monthly gain since March.

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And Besting most forecasts, once again,

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the mix of industries adding
jobs was unsurprising.

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Healthcare and leisure and hospitality
remained the primary drivers of new jobs.

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While manufacturing slide continued,
December's upside to prize,

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closed the books on yet another
strong year for the labor market.

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Payrolls ended 2024 with 2.23
million more jobs than in 2023.

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And while this marks a slowdown from
2020 threes, 3 million job gain,

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it aligns with the average annual
pace in the three years proceeding,

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the pandemic recession,

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suggesting that the labor
market remains on solid footing,

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the labor market will be
starting 2025 in greater balance.

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The excess demand for labor that
characterize the post pandemic economy has

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largely abated declining job openings,

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coupled with robust labor force gains
from the recent surge in immigration,

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worked to loosen the
labor market through 2024.

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As firms that were previously starving
for workers were able to fill many open

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positions. As a result,

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there were just more than one job
opening for every unemployed person in

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November, down from more than two
vacancies for every unemployed person.

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At its peak in March, 2022,

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the economy is generally in a
good place and small businesses,

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which account for about half of
all jobs, are finally feeling it.

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Small business confidence has come back
with a fury since the November election

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in December.

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The NFIB Small Business Optimism Index
jumped to its highest in six years.

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Main street's outlook for the economy
over the next six months surged to more

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than to a more than two decade high
leading December's headline gain

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boosting their confidence
that the economy will improve.

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Near term is the expectation
that deregulation and
lower taxes will help boost

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economic growth in the next
presidential administration. However,

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uncertainty on Main Street remains above
average as small firms around the edge

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of their seats awaiting more clarity
about the scope and scale of Trump's

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promised tariffs and deportations,

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which could result in higher
input and labor costs.

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Thank you, Justin.

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The US economy has been navigating
a complex mix of challenges and

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course correction over the last year.

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And its not surprising to
hear 25 is envisioned as a

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year of adjustment and
of measured adaptation.

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Particularly with the upcoming
change in administration.

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Inflation is expected to stabilize
bringing further relief to consumers,

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but prices for some goods may
continue and upward trend,

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particularly those affected by
tariffs, the housing market is cooling,

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but the affordability crisis
continues with mortgage interest rates

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roaming 7% on already high housing crisis.

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There are a few sticky economic themes
from 2024 we identified affecting

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the Yes consumer this year
and our predictions for 2025.

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So let's dive in, Emmaline,

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one of these being tariffs and
prices addressed by Dr. Rob

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Wescott during Market Pulse.

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Would you share your thoughts with
the larger audience on this topic?

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Yeah, definitely. Thank you for thank
you for the opportunity. I love I love,

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you know, chatting with everyone.
So as you know, as you know,

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we talked with many economists around
this topic as well as our own perspective

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on understanding what are some of the
biggest impacts potentially to inflation

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in the coming year. One of those
will be tariffs. And, you know,

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if we think about, you know, tariffs,

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you know president-elect Trump described
tariff as one of the most beautiful

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words in the dictionary, but what
does that really mean? And, you know,

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the standpoints of you know, a tariff
is, you know, the taxation of you know,

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goods coming in from an import
based status that you know,

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that companies can leverage to, you
know, to build whatever their you know,

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creating.

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And so there's different impacts that
it can have downstream depending on you

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know, how those are applied and how
the, how that's you know, occurs,

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especially depending on where the source
of that those things are coming in

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from. And so there, you know,

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depending on where things land from a
tariff standpoint it's either could be you

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know, a negative GDP impact
or inflation of some kind.

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And so if we think about the various
ways that, that, that could occur in,

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in discussions with with
Keybridge, you know,

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they describe three different levels of,

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of that potentially occurring as
posturing, light implementation,

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or heavy implementation. And if we
consider a posturing perspective,

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it's like threatening
the tariffs you know,

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with implemented implementation being
slightly low with a little bit more

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targeted perspective towards China.

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And then a light implementation would be
a 10% across the board and 60% against

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China. And a heavy implementation would
be 20% across the board and, you know,

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upwards 600 to 200% against against
China. Mm-Hmm .

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Now there's different impacts that can
have, you know you know, for example, if,

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if it's just posturing,

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it does create a perspective
that there needs to be you know,

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less adherence to certain
supply chains from, you know,

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depending on where those
tariffs could potentially go.

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And potentially even building out
some things you know, more so in the,

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in the United States
there, there, but you know,

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that that's a longer term perspective.
So there likely would be, if,

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if it moves towards a more heavy
implementation negative GDP impacts

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that could be, you know,

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fairly significant and resulting in
some form of a recessionary period.

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And then also in addition
to that in, you know,

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the inflation that could occur if if
there's not any change to to address the

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increases in prices that
the consumer would bear.

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Yeah, Emmaline and I, I,

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I think it's interesting that e even
e even in your description of say

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the, the light implementation I,

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I think it's interesting to look
at how that impact would be felt.

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It's not that we'd see, you
know, homogenous, you know,

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increases in prices across the board.

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A lot of people might not feel
any change depending upon what's,

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what's being tariffed and,
and what is, you know, what,

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what those consumers
are are looking to buy,

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where others may feel a deep
gouge, you know, so, so it's,

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it'll be interesting to see how
the implementation of it comes out.

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And that's just in terms of sheer
volume and and size of the tariffs,

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but where those tariffs are. Yeah.
And not just by country, but you know,

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by industry, by sector, by consumer
goods or industrial goods and whatnot.

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I, yeah, I hear, I hear
both of what you're saying.

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I think the most interesting thing though,

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to me is there there was talk
last week of now having an an

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external revenue service.

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So Internal Revenue Service collects
for internal you know, internal taxes,

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external revenue services is gonna collect
these tariffs. And just maybe wonder,

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so does, does do we implement
the external revenue service?

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Then Doge turns right around
and cuts it. That, that's,

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that's what's interesting to me.

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, well I'll pull
on your Doge thread. Will,

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will the text form be simpler for the
external revenue services as opposed to

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the internal one?

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Yeah, that's the question.

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All.

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Great. And,

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and we're not even touching
on the retaliation or the
effects on foreign policy,

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right. Since we're keeping it
domestic. Absolutely. But yeah. Yeah.

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Very good point, Maria.

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Yep. Yeah, sorry. And
relating to foreign policy,

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I know Dave you've been sharing
with US immigration reform

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expectations, key focus for
incoming President Trump. What,

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what are you expecting
on this front in 2025?

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Yeah, thanks, Maria. So, you know,

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there's that initial reaction to
President's Trump statement around mass

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deportation, and I'll go back to what
Emily just talked about, posturing.

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So is it posturing? So are,

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are we really gonna see mass deportation
or is there a more nuanced approach

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where border security is addressed,

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but there's still that welcoming
of high highly skilled workers that

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allow the US economy to thrive?

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I recently read a paper,

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I think it was a couple days ago from
the Economic Innovation group and it

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really went into kind of the nuance
around the highly skilled worker and the

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benefits to the US economy in
terms of even seeing faster

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and higher wage growth for native born
CI citizens and actually improving the

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deficit. You know,

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we're not gonna belabor whether
that's an accurate statement or not.

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I know I've seen Liz Lindsay sorry.

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There was an article in the
journal from one of our, our,

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our sitting senators around
immigration and you know,

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addressing some of the negatives,

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but the positive was around the H
one B visa program and how important

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that is. And so, and,

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and actually kind of
extolling an expansion a

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streamlining,

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if you will to increase
the amount of visas that we

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currently accept.

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Dave, the, the thing that strikes me
about this whole topic in, in general, I,

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I, I like the, that you, you mentioned
sort of the, the positive, you know the,

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the H one level, you know, visa.

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But I think on the other end of
the spectrum, you have, you know,

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the consequences of, of, of the
impacts on, on labor essentially. And,

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and you know, Maria, you mentioned the,
the stickiness of the affordability,

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you know, theme that we've been struggling
with for a couple years now, and,

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you know, continue to struggle
well in, you know, into 2025

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deportations on any scale are going
to, you know, just exasperate that,

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you know, if you think about, you
know, the, the costs of a lot of what,

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you know, people are complaining
about the price of eggs now,

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that's not gonna help. Yep.

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Yeah. Your culture services.

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Mm-Hmm . Yeah.

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That's, that's one of my biggest concerns
is around the, the, the farming side.

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You know, if we're, you know, 'cause the,

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the price of eggs has been such a
heavy topic with the heavy percent of,

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was it you know, 40 something,

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50 something percent of
farm workers are you know,

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believe to have some form of un
undocumented nature. So it's,

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it just becomes a little tricky.

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And absolutely immigration reform is
something that's that does need to occur.

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Yeah.

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It's also when you look
too at the Emily, the, the,

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the format that you kind of put
on on tariffs. I mean, we, we,

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we do think about the, the notion that
there is a lot of posturing here as well.

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The, you know, the question is is there,

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is there strength in posturing above and
beyond then the capability of actually

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implementing what we've, what
we've heard the administration say?

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So it will be interesting to see
how, how closely you know, the,

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the threat follows to the action.

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Yeah.

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So to kind of take these points and
kind of to bring it home is really I'll

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address kind of where I think the, you
know, the impact might be felt on the,

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on the US average US citizen side
or the consumer as we try to avoid

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to classify all all Americans.

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So is there confidence you know,
people will be, are wondering,

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you know, can I stay in
this country? Businesses,

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, as you just
talked about you know,

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agriculture even on the housing side,

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a lot of the work that's done in
those industries is really on the

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you know, the potentially Imma, you
know, illegal immigrant population.

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So we have a housing shortage. We
have, we need more houses built,

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and yet we potentially
have a, a, a a damage or,

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or a a shock to the workers that that
would facilitate building more houses.

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And so you know, there's a lot to,

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to really think about
with that with that impact

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on, you know, on consumers as
well as businesses. So, you know,

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where we go remains to be seen.

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Thank you, Dave. And maybe bringing it
back to the domestic scenario, Jesse,

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you highlighted rate cuts in
your predictions last year.

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What are you expecting for this year?

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Yeah, thanks, Maria. I probably should
say that I'm expecting, you know,

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00:13:38,866 --> 00:13:42,065
something just to, to leave it
really vague, but way to go.

229
00:13:42,065 --> 00:13:43,425
Out on a limb there, Justin. That's right.

230
00:13:43,425 --> 00:13:44,258
Right. Yeah.

231
00:13:44,425 --> 00:13:46,505
It will either change or not. Yeah.

232
00:13:46,775 --> 00:13:49,705
Yeah. They, they will, they
will, they will change.

233
00:13:50,505 --> 00:13:51,285
There is a glass.

234
00:13:51,285 --> 00:13:52,118
No, I think, you know.

235
00:13:52,425 --> 00:13:52,925
.

236
00:13:52,925 --> 00:13:57,385
2025, you know, I personally, I
feel like it's gonna be a good year.

237
00:13:57,386 --> 00:14:00,865
Certainly, I think we're still seeing
growth in the economy. You know,

238
00:14:00,866 --> 00:14:05,105
we're seeing job creation, good
wage gains, low unemployment,

239
00:14:05,106 --> 00:14:08,065
falling prices. So that's,
that's all the good stuff.

240
00:14:08,304 --> 00:14:11,825
I think what that's what's gonna
happen is when you think of Fed policy,

241
00:14:12,085 --> 00:14:16,385
the fed monetary policy is really
gonna follow what those numbers say.

242
00:14:16,525 --> 00:14:19,425
But then we also have kind
of an unexpected component,

243
00:14:19,445 --> 00:14:23,305
and those are really obviously
hard to hard to forecast.

244
00:14:23,306 --> 00:14:27,345
Those are gonna be things like a hot
read on an economic print that comes

245
00:14:27,346 --> 00:14:27,586
through.

246
00:14:27,586 --> 00:14:31,825
Think of what we saw last week with the
job growth numbers coming in higher.

247
00:14:32,465 --> 00:14:36,225
I think we also would expect to see
some economic challenge from the,

248
00:14:36,285 --> 00:14:39,425
the things we just talked
about. Also things like fire,

249
00:14:39,426 --> 00:14:42,345
think about the fires in, in
the west and the, you know, the,

250
00:14:42,365 --> 00:14:46,545
the fallout from that cyber attacks
on our banking systems, et cetera. So,

251
00:14:47,125 --> 00:14:51,605
you know, we can't, we can't
really forecast or predict what,

252
00:14:51,606 --> 00:14:56,405
what those unexpected events will
do to policy decisions from the Fed.

253
00:14:56,785 --> 00:15:00,205
Having said that, though, I think
that, you know, we saw in 2024,

254
00:15:00,295 --> 00:15:04,685
there were significant policy
cut rate cuts via policy

255
00:15:05,385 --> 00:15:08,005
and, and maybe more
than what some thoughts.

256
00:15:08,145 --> 00:15:11,085
So I think as I think to this year,

257
00:15:11,205 --> 00:15:14,565
I think we're gonna see that at least
what my baseline case would be is that

258
00:15:14,566 --> 00:15:18,805
we're not gonna see any rate
cuts. Or if we do we'll,

259
00:15:18,806 --> 00:15:22,325
we'll see definitely rate cuts
in, in the longer term, you know,

260
00:15:22,765 --> 00:15:24,325
probably not any rate
cuts in the near term.

261
00:15:24,665 --> 00:15:26,245
And I think that's just based on the,

262
00:15:26,265 --> 00:15:30,925
the Fed needing to see kind of more
data to really get a better sense of,

263
00:15:31,105 --> 00:15:32,125
of true direction.

264
00:15:32,905 --> 00:15:33,435
Hey, Jesse,

265
00:15:33,435 --> 00:15:38,295
with the recent jobs and
the was it the producer

266
00:15:38,296 --> 00:15:41,415
price index that came out that was,
yeah, PPI slightly high, but not,

267
00:15:41,575 --> 00:15:46,135
but lower than expected, you
know, does that change, you know,

268
00:15:46,136 --> 00:15:51,055
your thoughts on that in terms of, has
the Fed actually reached its target yet?

269
00:15:52,125 --> 00:15:54,135
Yeah, I mean, I think, you know,

270
00:15:54,255 --> 00:15:57,695
I think with and we saw the CPI
number come out as well yesterday,

271
00:15:57,895 --> 00:16:00,455
I think with the you know,

272
00:16:01,115 --> 00:16:05,215
you can always kind of dissect the
report to figure out, you know,

273
00:16:05,265 --> 00:16:10,015
based on your predictions, what data's
gonna support you. I think overall,

274
00:16:10,065 --> 00:16:12,975
we're still seeing that prices
are moving in the right direction.

275
00:16:13,875 --> 00:16:17,335
But I think the Fed's gonna be more
cautious this year. And, and I,

276
00:16:17,336 --> 00:16:20,335
and I think as a result of that, I
just, I don't think we're gonna see,

277
00:16:20,955 --> 00:16:21,425
you know,

278
00:16:21,425 --> 00:16:25,415
broad scale cuts because the hardest
thing to do would then to be turn around

279
00:16:25,416 --> 00:16:28,015
and see inflation start to increase again,

280
00:16:28,016 --> 00:16:30,215
maybe through these policies
that we're talking about.

281
00:16:30,715 --> 00:16:34,375
And then the Fed has to react with
rate hikes. You know, I, I mean,

282
00:16:35,485 --> 00:16:38,215
with the Biden administration, I
can't imagine what the hikes would be,

283
00:16:38,216 --> 00:16:41,535
let alone with now the Trump
administration, you know,
thinking about just the,

284
00:16:41,875 --> 00:16:46,255
the interplay between between the
Fed and, and the executive branch.

285
00:16:46,555 --> 00:16:49,295
So I think that could, you know,
that could also weigh in as well.

286
00:16:49,495 --> 00:16:53,295
I think they're gonna wanna stay more
cautious especially if they wanna keep

287
00:16:53,296 --> 00:16:54,129
their job.

288
00:16:54,285 --> 00:16:57,455
Yeah. The the couple things that Dave
and I just talked about, you know,

289
00:16:57,456 --> 00:16:59,895
with respect to price increases,

290
00:17:00,105 --> 00:17:03,215
price increases and inflation
is what drives you know,

291
00:17:03,216 --> 00:17:06,335
changes in rates to go higher. And,

292
00:17:06,395 --> 00:17:10,295
and so it really depends on what's
gonna happen downstream with the other

293
00:17:10,296 --> 00:17:13,855
peripheral aspects that would
have an impact on prices. And,

294
00:17:14,015 --> 00:17:16,775
and it could impact things from a
positive standpoint or negative standpoint

295
00:17:17,256 --> 00:17:21,015
with respect to those prices.
And I think where you, I,

296
00:17:21,095 --> 00:17:22,494
I really liked how you frame that, Jesse,

297
00:17:22,595 --> 00:17:27,415
around the a little more cautious
because anytime there is uncertainty,

298
00:17:27,565 --> 00:17:30,975
there's less action and, and less
action. It's there, there. And,

299
00:17:31,375 --> 00:17:33,895
and by some regards, like if we think
about these things as being posturing,

300
00:17:33,896 --> 00:17:34,096
light,

301
00:17:34,096 --> 00:17:38,935
imitation or heavy there might even be
some form of forced uncertainty to be

302
00:17:38,936 --> 00:17:41,215
able to like, to test
the waters to see what,

303
00:17:41,445 --> 00:17:43,055
what would be the best pathway forward.

304
00:17:43,765 --> 00:17:47,135
Yeah. And I might close
out just by saying,

305
00:17:47,295 --> 00:17:50,565
I think in terms of what I'm
looking for, then you know,

306
00:17:50,585 --> 00:17:54,885
I'm gonna look for things
like wage increases. Where,

307
00:17:54,886 --> 00:17:57,005
where are wages this
year coming up? You know,

308
00:17:57,006 --> 00:18:00,165
is there more pressure because workers
are making more money and they have more

309
00:18:00,166 --> 00:18:04,725
options and job switching? I'm
also gonna look at, you know,

310
00:18:05,025 --> 00:18:09,244
what's happening with the
credit perspective in the
economy with delinquency,

311
00:18:09,385 --> 00:18:13,405
you know, so are consumers
strong? Are they you know,

312
00:18:13,406 --> 00:18:15,605
are we seeing a higher
delinquency that could, you know,

313
00:18:15,606 --> 00:18:18,285
potentially ripple
through the economy? So,

314
00:18:18,565 --> 00:18:23,565
so kind of also looking at those more
consumer impacts and you know, and,

315
00:18:23,765 --> 00:18:25,325
and understanding where the fed,

316
00:18:25,326 --> 00:18:27,365
because the fed's gonna be
looking at all that as well.

317
00:18:27,705 --> 00:18:30,325
So kind of understanding where
their, their thinking would be.

318
00:18:31,975 --> 00:18:32,808
Thank you, Jesse.

319
00:18:33,085 --> 00:18:35,685
Lemme ask, let me ask you
another aspect of that,

320
00:18:35,686 --> 00:18:39,484
and maybe this even
applies to what Dave and,

321
00:18:39,485 --> 00:18:43,805
and Emily and also spoke about, but what,

322
00:18:43,955 --> 00:18:48,165
what are your expectations around the
impacts on consumer confidence, you know,

323
00:18:48,765 --> 00:18:52,545
for any, any change in,

324
00:18:52,645 --> 00:18:57,185
in rates or lack thereof? Would
that be a, a downward pressure?

325
00:18:57,186 --> 00:18:58,225
Do you feel that there's,

326
00:18:58,375 --> 00:19:02,625
there's a maybe a sense on the
consumer sentiment side that,

327
00:19:02,695 --> 00:19:07,545
that we're in a good place and,
and, you know, holding still as,

328
00:19:07,605 --> 00:19:12,185
as you were mentioning, or or being
more cautious wouldn't necessarily be,

329
00:19:12,625 --> 00:19:13,458
you know, a disappointment.

330
00:19:13,805 --> 00:19:17,345
And I guess the same would hold true for
either of the other topics that were,

331
00:19:17,405 --> 00:19:21,305
you know, that Emily talking
about tariffs and, and Dave on,

332
00:19:21,365 --> 00:19:24,625
on immigration. If, if
these things hit, you know,

333
00:19:24,725 --> 00:19:28,425
is that an area where we could
see a, a pretty sizable change?

334
00:19:29,545 --> 00:19:32,955
Well, I mean, I would say you, you
started out saying consumer confidence,

335
00:19:32,956 --> 00:19:36,435
and I would say, you know, I certainly
use that as a directional indicator.

336
00:19:37,515 --> 00:19:38,395
I don't think though,

337
00:19:38,396 --> 00:19:42,195
that we would see the Fed using
something like consumer confidence as a

338
00:19:42,196 --> 00:19:45,435
barometer for making a move.
And it's simply because there's,

339
00:19:45,436 --> 00:19:47,795
there is noise in that data,
right? You know, you can,

340
00:19:47,796 --> 00:19:52,115
you can actually look at that data and
if you graft it over the last, you know,

341
00:19:52,116 --> 00:19:56,115
20 to 30 years, you can actually see
when elections happen because, you know,

342
00:19:56,116 --> 00:20:00,475
there's a you know, there's a
bias towards who's, you know,

343
00:20:00,675 --> 00:20:03,035
whose party's in power. I
do think, though, I mean,

344
00:20:03,036 --> 00:20:07,755
overall consumer confidence does
indicate kind of the direction that the

345
00:20:07,756 --> 00:20:09,635
economy is going. And so, you know,

346
00:20:09,655 --> 00:20:14,355
as consumers feel more burdened with
things like service level inflation

347
00:20:15,156 --> 00:20:16,994
those, those numbers
just not coming down, I,

348
00:20:17,035 --> 00:20:20,395
I think that's where you're gonna
see, you know, the Fed taking those,

349
00:20:20,445 --> 00:20:22,994
those types of movements
into consideration. You know,

350
00:20:22,995 --> 00:20:25,475
are we seeing wage growth that's you know,

351
00:20:25,476 --> 00:20:28,994
that's maybe beyond what was expected,
in which case you're, you know,

352
00:20:28,995 --> 00:20:33,515
you're seeing more pressure on on those
inflation numbers. And same with what,

353
00:20:33,516 --> 00:20:38,275
what Emily said with tariffs and
Dave, you know, said with immigration.

354
00:20:38,395 --> 00:20:38,596
I mean,

355
00:20:38,596 --> 00:20:43,435
those are gonna be obviously factors
that play into overall confidence and,

356
00:20:43,575 --> 00:20:46,355
and, you know, and, and then
you know, driving the, the,

357
00:20:46,455 --> 00:20:48,925
the policy that the Fed
is is gonna put forward.

358
00:20:50,994 --> 00:20:55,945
Thank you, Jesse. And I know
we have so, so much time to,

359
00:20:55,965 --> 00:20:58,265
to address, we still have a, a hot topic,

360
00:20:58,266 --> 00:21:02,905
which is housing Tom with us
mortgage debt at almost 13 trillion,

361
00:21:02,925 --> 00:21:07,105
almost 74% of the total consumer
debt as of November of last year.

362
00:21:07,535 --> 00:21:11,425
What are you expecting specific
to, to housing in 2025?

363
00:21:11,895 --> 00:21:13,305
Yeah, it's, it, it,

364
00:21:13,415 --> 00:21:16,785
it's probably appropriate that we have
this one following all of the other

365
00:21:16,786 --> 00:21:21,625
topics because all of the other
topics impact, yeah. What the,

366
00:21:21,626 --> 00:21:25,625
the housing market's gonna
be. And and, and as the,

367
00:21:25,845 --> 00:21:28,025
the father of, of a, you know,

368
00:21:28,234 --> 00:21:31,345
child who is looking to make his
first housing purchase in the,

369
00:21:31,365 --> 00:21:36,265
the coming months, unfortunately, I can't
say that it's a great environment for,

370
00:21:36,365 --> 00:21:39,065
for him to do so. We're,

371
00:21:39,066 --> 00:21:43,335
we're still slogging along in,
in the housing department, and,

372
00:21:43,395 --> 00:21:47,935
and it's probably going to continue
the, the same set of culprits, you know,

373
00:21:47,936 --> 00:21:52,535
high housing prices driven predominantly
by, you know, short inventories

374
00:21:54,195 --> 00:21:58,055
you know, high, you know mortgage
rates, you know, you know,

375
00:21:58,056 --> 00:22:02,775
making it even more difficult. It's,
it's something that's impacting any

376
00:22:04,335 --> 00:22:07,175
consumer that's, that's
in the home buying market,

377
00:22:07,955 --> 00:22:12,415
but particularly the, the younger
generations. Yeah. For obvious reasons.

378
00:22:13,015 --> 00:22:17,055
A lot of the older generations, such as
myself, we've, we've been in our homes,

379
00:22:17,155 --> 00:22:21,015
you know, we've built up equity in there.
We, you know, even if we are in the,

380
00:22:21,475 --> 00:22:22,775
the market for a new house,

381
00:22:22,955 --> 00:22:26,375
we could use that equity and our savings
and the stuff that we've built up over

382
00:22:26,484 --> 00:22:30,494
time to help offset some of the,

383
00:22:30,495 --> 00:22:31,975
those higher costs and the,

384
00:22:32,075 --> 00:22:34,375
the overall affordability of
going into the housing market.

385
00:22:34,955 --> 00:22:37,055
The younger generations
don't have that. They, and,

386
00:22:37,335 --> 00:22:40,215
and they're still
wanting to, to, you know,

387
00:22:40,435 --> 00:22:44,175
to make that first housing
purchase. And we've seen in the,

388
00:22:44,195 --> 00:22:47,415
the data that the average
mortgage balance for,

389
00:22:47,835 --> 00:22:51,695
for those younger generations is rising
at a much higher rate than any other

390
00:22:51,696 --> 00:22:53,575
generations. You know,
simply because, you know,

391
00:22:53,576 --> 00:22:57,335
they're entering the market at a, at
a pretty nasty time to be doing. So.

392
00:22:59,305 --> 00:23:00,545
I was hearing yesterday,

393
00:23:00,575 --> 00:23:05,145
even on the positive side this is
driving alternatives and innovation

394
00:23:05,365 --> 00:23:09,065
on the rent to own and the shared housing
market. Mm-Hmm . So some,

395
00:23:09,285 --> 00:23:11,744
you know, variation of
those struggles, right?

396
00:23:11,775 --> 00:23:15,145
What are other alternatives might
surface, right, right. As a result.

397
00:23:15,415 --> 00:23:18,225
Yeah, you certainly see, see
the innovation, you know,

398
00:23:18,226 --> 00:23:22,065
as people look for alternatives. And, and,

399
00:23:22,244 --> 00:23:27,225
and I'd love to say that it's a
temporary you know, fix until the,

400
00:23:27,365 --> 00:23:30,785
the, the conditions improve.
But as we've been talking about

401
00:23:32,675 --> 00:23:36,375
here, there's, there,

402
00:23:36,376 --> 00:23:40,335
there are completely negative, you
know, there are some things that might,

403
00:23:40,675 --> 00:23:44,175
you know, drive the, the
housing conditions in a,
in a better way, you know,

404
00:23:44,415 --> 00:23:48,565
as including stuff that the
incoming administration has has,

405
00:23:49,225 --> 00:23:52,805
you know, mentioned is a, is a
priority, tax cuts, you know,

406
00:23:53,165 --> 00:23:57,085
easing of regulatory, you know,
conditions. Those may, you know, be a,

407
00:23:57,165 --> 00:24:01,765
a positive boost for builders to, you
know, to go out there and, and, you know,

408
00:24:02,315 --> 00:24:06,085
take the risk of, of building
more. But on the flip side,

409
00:24:06,086 --> 00:24:09,445
it could just as easily have the negative
impacts of some of the policies being

410
00:24:09,446 --> 00:24:12,365
discussed, you know, some of which
we've been talking about here. You know,

411
00:24:12,366 --> 00:24:17,005
if we've got, you know, a ding to the,
the, the labor, you know, availability,

412
00:24:17,006 --> 00:24:19,445
that's not gonna help, you
know, ease the inventory.

413
00:24:20,865 --> 00:24:23,765
If we increase, you
know, tariffs, you know,

414
00:24:23,766 --> 00:24:26,525
you might not associate that
directly, but if, you know,

415
00:24:26,755 --> 00:24:30,484
increased tariffs have an impact on
the materials that go into building,

416
00:24:31,005 --> 00:24:35,525
you know and, and maintenance of, of
housing, that's gonna be felt as well.

417
00:24:35,705 --> 00:24:39,325
So it's, it's definitely
I I do think that,

418
00:24:39,555 --> 00:24:43,765
that there will be some breaking
up of the, the log jam, but it's,

419
00:24:43,875 --> 00:24:45,165
it's still gonna be slow.

420
00:24:46,315 --> 00:24:49,925
Yeah. I, I think, Tom, one of the things
I was actually thinking about as a,

421
00:24:50,305 --> 00:24:54,045
as a now home purchaser
in in this en environment,

422
00:24:54,105 --> 00:24:58,285
I'm actually going through that process
as well, selling and buying you know,

423
00:24:58,286 --> 00:25:00,045
obviously rates are, I, I'm,

424
00:25:00,305 --> 00:25:03,685
I'm kind of blown away working
with mortgage lenders right now,

425
00:25:03,686 --> 00:25:05,325
just seeing where the rates are, you know,

426
00:25:05,565 --> 00:25:09,525
'cause my frame of reference was
refinancing in the, the boom Yeah.

427
00:25:09,685 --> 00:25:10,484
The refinanced boom after.

428
00:25:10,484 --> 00:25:11,325
We were spoiled, weren't we?

429
00:25:11,325 --> 00:25:13,965
Yeah, yeah. You know, I mean,
I I, I dare to say like,

430
00:25:13,966 --> 00:25:16,605
I have a one in front of
my my rate right now, but

431
00:25:18,244 --> 00:25:21,645
I think one of the things that I, you
know, I kind of think about is the,

432
00:25:22,255 --> 00:25:25,085
right now the, you know,
the, the Fed as we just,

433
00:25:25,105 --> 00:25:27,565
or as I talked about the
Fed had cut rates last year,

434
00:25:27,585 --> 00:25:31,565
but we really didn't see any of that
translate into movement on rates.

435
00:25:31,665 --> 00:25:35,885
And that's has a lot to do with the,
the 10 year treasuries and the premiums,

436
00:25:36,125 --> 00:25:38,925
right. You know, associated with
those. I do hope, you know, as,

437
00:25:38,945 --> 00:25:41,965
as the new administration comes in
and maybe things settle a little bit,

438
00:25:42,015 --> 00:25:46,845
we'll see that that premium, that yield
premium, you know, starts to, to fall.

439
00:25:47,305 --> 00:25:49,205
And maybe we do see you know,

440
00:25:49,206 --> 00:25:54,085
we see a reduction in mortgage rates
just kind of naturally as the as the

441
00:25:54,086 --> 00:25:57,805
unknown of the new administration starts
to work itself out, you know, so that,

442
00:25:58,145 --> 00:26:01,325
you know, that could help as well as,
as we think of, you know, direction,

443
00:26:01,326 --> 00:26:05,365
even if we don't see large scale rate
decreases from the Fed in, you know,

444
00:26:05,366 --> 00:26:09,445
in 2025, that yield spread being
a little bit smaller might help.

445
00:26:10,855 --> 00:26:14,605
Thank you for all sharing all those
thoughts. Before we close out,

446
00:26:14,925 --> 00:26:16,845
I do want to recap such,

447
00:26:17,105 --> 00:26:22,005
so similar to the lighting round that
Jesse went through with our prediction

448
00:26:22,405 --> 00:26:25,005
leveling set for 24,

449
00:26:25,185 --> 00:26:29,765
if you could in a summary
summarized version

450
00:26:30,375 --> 00:26:34,975
share your predictions for 25.
Let's get started with you, Tom.

451
00:26:35,005 --> 00:26:36,494
I'll go first. Yeah. Do you want Tom.

452
00:26:36,815 --> 00:26:39,335
Tom to go first? Yeah, sure. I'll,
I'll go first. Yeah, because I,

453
00:26:40,215 --> 00:26:41,048
I just sort of,

454
00:26:41,255 --> 00:26:46,005
I kind of obliquely re
referred to it is that my safe

455
00:26:46,006 --> 00:26:47,805
prediction is that the, the,

456
00:26:47,984 --> 00:26:52,165
the mortgage market will continue to be
the housing market and mortgage market

457
00:26:52,166 --> 00:26:56,645
will, will both be con continuing
to just sort of slog through 2025.

458
00:26:57,265 --> 00:27:01,925
My, my little more daring
prediction will be that

459
00:27:03,025 --> 00:27:03,965
Gen Z will,

460
00:27:04,075 --> 00:27:08,685
will continue to have an even bigger
mark on its head from the other

461
00:27:08,686 --> 00:27:09,685
generations that,

462
00:27:09,715 --> 00:27:13,565
that they'll be painted as lazy and
not moving out of their parents' ba

463
00:27:14,484 --> 00:27:18,005
basements when in reality it's
because they just can't afford to.

464
00:27:18,965 --> 00:27:22,365
Wow. I, I have a different
take similar to yours.

465
00:27:22,366 --> 00:27:24,965
Affordability for sure will be limited,

466
00:27:25,385 --> 00:27:29,445
and I don't see the housing market

467
00:27:30,565 --> 00:27:31,885
or, or the help as you said,

468
00:27:31,886 --> 00:27:35,285
towards younger generations
going anywhere until prices.

469
00:27:35,725 --> 00:27:37,805
It's not so much the interest
rate, but prices decrease.

470
00:27:38,305 --> 00:27:42,525
And I'm positive or or optimistic on
the Gen ZI think they will teach us a

471
00:27:42,526 --> 00:27:47,445
lesson. They're, they're way more
focused than we, than we envision.

472
00:27:47,545 --> 00:27:50,605
And they, they will surprise
us. I think that that.

473
00:27:50,685 --> 00:27:54,685
Will, I, I share that opinion. Maria,
I am optimistic about the generation,

474
00:27:55,445 --> 00:28:00,045
regardless of, you know, their attitude
towards avocado toast, ,

475
00:28:00,244 --> 00:28:00,525
look at two.

476
00:28:00,525 --> 00:28:02,005
Glass half full peoples. I love it.

477
00:28:04,045 --> 00:28:04,878
Emmaline.

478
00:28:05,275 --> 00:28:07,955
I personally like avocado toast
too, so I take offense to that.

479
00:28:08,315 --> 00:28:09,148
.

480
00:28:10,315 --> 00:28:11,315
But the, I I do think very.

481
00:28:11,795 --> 00:28:12,234
California.

482
00:28:12,234 --> 00:28:12,635
Yeah. I,

483
00:28:12,635 --> 00:28:16,675
I do think that affordability will
likely be one of the higher challenges.

484
00:28:16,875 --> 00:28:19,195
'cause We, you know, of all the things
we talked about, price increases,

485
00:28:19,715 --> 00:28:20,994
were likely going to be, you know,

486
00:28:20,995 --> 00:28:24,115
some of the impact that we
could potentially see even
with those uncertainties.

487
00:28:24,385 --> 00:28:27,955
Like whatever un uncertainty could
happen, I, but with the affordability,

488
00:28:28,075 --> 00:28:30,955
I do think it's gonna have some
level of nuance associated with it,

489
00:28:31,755 --> 00:28:35,355
specifically that nuance will
likely have a further you know,

490
00:28:35,356 --> 00:28:37,795
spreading out of the KS shaped
economy we've been talking about,

491
00:28:37,865 --> 00:28:41,475
because we know that delinquencies have
been on the rise and, you know, auto,

492
00:28:41,495 --> 00:28:42,215
for example, are,

493
00:28:42,215 --> 00:28:46,755
is higher at a delinquency level than
it was during the during the great

494
00:28:46,756 --> 00:28:49,715
Recession, right? You know,
however, auto delinquencies,

495
00:28:49,716 --> 00:28:53,395
when we look at payment hierarchy
it is still at a highest,

496
00:28:53,575 --> 00:28:56,075
one of the highest likelihood of
getting paid. So if someone is,

497
00:28:56,135 --> 00:28:59,835
is moving at a place where
they're delinquent on their
auto and it's higher than

498
00:28:59,836 --> 00:29:03,155
the great recession, that means they
haven't paid their other debts first.

499
00:29:03,495 --> 00:29:05,955
So there's like, there's, there's
gonna be continued separation.

500
00:29:05,956 --> 00:29:09,715
So those people who have been able
to invest in the stock market,

501
00:29:09,815 --> 00:29:14,595
who have you know, who have like a,
a home, who have all those things,

502
00:29:14,615 --> 00:29:17,235
who have the financial literacy
will continue to, to thrive,

503
00:29:17,236 --> 00:29:20,115
where those consumers who have
been struggling may struggle more.

504
00:29:22,285 --> 00:29:25,015
Thank you. Dave or Jesse?

505
00:29:26,255 --> 00:29:28,695
I, I, okay, go ahead, Dave.
I'll, I'm close this up.

506
00:29:28,695 --> 00:29:29,735
Because unlike, yeah,

507
00:29:29,736 --> 00:29:34,495
because unlike you there's a glass
I'm gonna make a bold prediction.

508
00:29:35,915 --> 00:29:39,015
So we're recapping on
the immigration job side,

509
00:29:40,235 --> 00:29:44,395
my bold prediction. There will
be a bipartisan bill passed

510
00:29:46,575 --> 00:29:49,385
this year that secures the border,

511
00:29:50,035 --> 00:29:54,735
while at the same time a lot
expanding the H one B visa program.

512
00:29:57,505 --> 00:29:58,355
That is bold.

513
00:29:59,035 --> 00:29:59,915
Yeah. Yeah. It's, it's bold.

514
00:29:59,945 --> 00:30:03,395
It's bold to say bold and
bipartisan in the same statement. I.

515
00:30:03,555 --> 00:30:04,388
Bought it. .

516
00:30:04,555 --> 00:30:08,355
. All right, I'll
close this out. So yeah,

517
00:30:08,515 --> 00:30:12,875
I know you know, I, I kind of, I kind of
hit on it when I, when I spoke before,

518
00:30:12,895 --> 00:30:14,795
but I think what we're, what,

519
00:30:14,796 --> 00:30:18,555
what my baseline would be from a rate
standpoint is that we're gonna see

520
00:30:19,805 --> 00:30:22,075
maybe one cut as a, as a baseline.

521
00:30:22,415 --> 00:30:25,355
And then my bold prediction
would be that there,

522
00:30:25,525 --> 00:30:28,835
there could be rumblings of rate
hike at at least a rate hike,

523
00:30:28,855 --> 00:30:32,875
and it's going to, it's gonna cause
chaos. Having said that, though,

524
00:30:32,876 --> 00:30:33,795
I do wanna review that.

525
00:30:33,796 --> 00:30:37,035
There were two things that I think
came to mind as I was just listening to

526
00:30:37,036 --> 00:30:40,515
everybody talk about their, their
different subjects. You know,

527
00:30:40,555 --> 00:30:45,515
I spoke of unexpected
impacts to monetary, fiscal,

528
00:30:45,875 --> 00:30:48,675
monetary policy. One that I,

529
00:30:48,676 --> 00:30:53,155
that I do wanna shine light on when we
think of federal student loans. So we,

530
00:30:53,156 --> 00:30:56,995
we do know that delinquencies are gonna
be reported now on those student loans.

531
00:30:57,025 --> 00:31:00,795
They're, you know, they're coming
through the you know, sometime in the,

532
00:31:00,815 --> 00:31:05,715
the late early February to, to
mid-February timeframe. And you know,

533
00:31:06,095 --> 00:31:06,928
as I said before,

534
00:31:07,055 --> 00:31:11,595
that's what I think we can't
predict necessarily in terms of

535
00:31:12,355 --> 00:31:14,635
building that through to,
to what happens with rates.

536
00:31:14,855 --> 00:31:18,435
But something like you know, a higher
level of student loans and the,

537
00:31:18,455 --> 00:31:23,035
and the turmoil that that causes, like
that, that's I think where you know,

538
00:31:23,036 --> 00:31:26,395
the Fed may have to pivot from that,
you know, from that one cut that I,

539
00:31:26,396 --> 00:31:28,515
that I mentioned. The other
thing I would mention, I,

540
00:31:28,645 --> 00:31:31,275
we've all kind of talked about
affordability, but you know,

541
00:31:31,295 --> 00:31:34,235
one that comes to mind is
insurance right now, you know,

542
00:31:34,236 --> 00:31:38,715
certainly housing insurance
on housing, it's it's, it's,

543
00:31:38,716 --> 00:31:43,075
it was already challenged let alone
now what happens with some of the, the,

544
00:31:43,415 --> 00:31:46,555
you know, tragedy we've seen on
the West coast. So, you know, just,

545
00:31:46,556 --> 00:31:50,235
just kind of throw that out as when we
think of unexpected events, they're,

546
00:31:50,236 --> 00:31:54,035
they're gonna come up. We know
they are. And and, and, you know,

547
00:31:54,155 --> 00:31:56,515
we just have to kind of size
'em, see what the impact is, and,

548
00:31:56,535 --> 00:32:00,595
and then figure out how that impacts
both the consumer and you know,

549
00:32:00,596 --> 00:32:01,429
and the economy.

550
00:32:03,525 --> 00:32:04,395
Thank you, Jesse.

551
00:32:04,575 --> 00:32:09,515
You wrapped us up very nicely with
other key topics to keep in mind.

552
00:32:10,436 --> 00:32:14,835
Thank you again, Jesse Davely and
of course, Tom for joining me today.

553
00:32:15,375 --> 00:32:18,435
To our listeners, I hope
you enjoyed today's topic.

554
00:32:19,135 --> 00:32:23,915
How do these predictions align with your
expectations for the year and what are

555
00:32:23,916 --> 00:32:27,915
your predictions for 2025? If, if you
would like to share these with us,

556
00:32:28,305 --> 00:32:32,515
with us, or have questions or
suggestions for future podcasts,

557
00:32:32,516 --> 00:32:35,755
please reach out to us at risk

558
00:32:38,475 --> 00:32:40,075
advisors@equifax.com. We
would love to hear from you.