Video Update - Valentine's Day, Tariffs, and Earnings

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Hey guys, welcome to the Real Income Report weekly update for the week of February 17, 2025. We've got Valentine's Day and all of the Russell Stover survival behind us, and today is President's Day, meaning we have a holiday-shortened week. This gives us a brief pause from all the market and government madness we've seen over the past week, from tariffs and inflation to geopolitics and policy uncertainties.

Inflation came in hotter than expected, but that shouldn’t surprise anyone. Services inflation, especially rents, remains stubbornly high. We’ve been clear that rents won’t decline permanently until the housing crisis is addressed, and we are far from solving affordability issues. Many homeowners over 55 are aging in place, unwilling to move due to family ties and local amenities. Furthermore, 60% of U.S. mortgages are locked in at below 4%, making it unlikely that homeowners will trade those for today’s 7% rates. That’s keeping a lot of supply off the market.

Meanwhile, the administration is talking about monetizing U.S. assets, but how exactly they would do this remains unclear. Selling national parks or gold reserves isn’t feasible without significant economic disruption. More importantly, tariffs continue to dominate headlines. New tariffs on Mexico, increased duties on steel and aluminum starting in March, and the pending 25% tariffs on Canada and Mexico set for March 1 remain uncertain. Will the president reinstate them, or is this just a negotiation tactic?

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