Wells Fargo revises economic outlook
Wells Fargo is sharply reducing its forecasts for economic growth and unemployment this year due to the President Trump tariffs plan, but perspective is important, according to economists.
Factoring in reduced consumer purchasing power, the banking giant is expecting essentially no growth in 2025 after 2.5% and 3% growth rates in recent years, while it predicts a rise of 50 or 60 basis points in unemployment from its current level of 4.2%.
Still, "in the grand scheme of history, that's a relatively modest slowdown if you're comparing it to COVID in 2020 or the financial crisis of 2008, or even more average recessions like what we saw in 2001," said Mike Pugliese, a Wells Fargo senior economist, in a video released Thursday. "So, while this is a big negative revision to our economic forecast, it's certainly not on the scale of some of the recessions we've seen over the past few cycles."
With higher inflation and weaker growth this year, the Federal Reserve likely will cut interest rates eventually, even though it hasn't loosened its monetary policy recently, according to Pugliese.
Fannie unloading $200 million in delinquent loans
Mortgage giant Fannie Mae said it is selling two portfolios of nonperforming loans totaling more than $205 million.
The first batch consists of roughly 1,110 "deeply delinquent" loans valued at $198.6 million, while the second includes 40 loans in Florida totaling $7.2 million, according to Fannie. Bids are due May 15 for the first portfolio and May 27 for the second. The company said it is marketing the sales with BofA Securities and First Financial Network.
Terms of the deals require buyers to offer options, including loan modifications and principal balance, "designed to be sustainable for borrowers," Fannie said in a statement.
Consumers aren't abandoning vacations, survey finds
Despite ongoing economic and housing affordability concerns, consumers aren't surrendering vacations, a survey released Thursday shows.
About two-thirds of respondents say they haven't adjusted travel spending for the rest of 2025, an analysis from Squaremouth found. Meanwhile, the respondents who are tightening their travel belts are only changing how they get from here to there, according to the survey of more than 2,000 U.S. travelers from April 14 to 23.
Travelers looking for cheaper options would help explain quarterly losses by both American Airlines and Southwest Airlines on Thursday.
“Historically, the airline industry has done well in periods of economic growth and certainty," American Airlines CEO Robert Isom said during the company’s earnings call. "The industry exited the fourth quarter with positive momentum, but this quickly shifted during the first quarter.”