>> THIS IS BALANCE OF POWER, LIVE FROM WASHINGTON, D. C. JOE: TO OUR TV AND RADIO AUDIENCES WORLDWIDE, WELCOME TO "BALANCE OF POWER." TONIGHT, RESET BUTTON.PRESIDENT TRUMP GOING TO IOWA TO PUT ATTENTION BACK ON THE ECONOMY BUT THE DOLLAR JUST WENT RED ON THE BLOOMBERG TERMINAL. ALSO A NOEM COMMODITY, PRESIDENT TRUMP SAYS HE IS STICKING WITH HIS EMBATTLED DHS SECRETARY AFTER HER REQUEST TO MEET LAST NIGHT IN THE OVAL, DEMOCRATS VOWING SHE WILL BE IMPEACHED IF SHE IS NOT FIRED. AND BIGGER THAN VENEZUELA.>> WE ...

THE PRESS NOW. I'M KELLY O'DONNELL IN WASHINGTON, WHERE THE WHITE HOUSE APPEARS TO BE SHIFTING STRATEGY AMID THE GROWING FALLOUT AND PUBLIC OUTRAGE AFTER DEADLY SHOOTINGS BY FEDERAL OFFICERS IN MINNEAPOLIS. RIGHT NOW, PRESIDENT TRUMP IS ON THE GROUND IN IOWA, WHERE HE'S SET TO SPEAK ON HIS ECONOMIC AGENDA AS THE WHITE HOUSE TRIES TO PULL THE HEADLINES BACK TO THE PRESIDENT'S AFFORDABILITY AGENDA AND AWAY FROM THE BACKLASH OVER HIS IMMIGRATION CRACKDOWN IN MINNEAPOLIS.WE WILL BRING YOU THE PRESIDENT'S REMARK ...

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>> LIVE FROM WASHINGTON, D. C. , THIS IS "BALANCE OF POWER" WITH JOE MATHIEU.JOE: PRESIDENT TRUMP HEADS FOR DES MOINES AS HIS BORDER CZAR LANDS IN MINNEAPOLIS. WELCOME TO THE TUESDAY EDITION AS THE PRESIDENT TRIES TO STEER THE NARRATIVE TO THE ISSUE OF AFFORDABILITY, EVEN AS HE ORDERS A CHANGING OF THE GUARD IN MINNEAPOLIS. WE’RE GOING TO GO TO GROUND AND GET THE LATEST ON MEETINGS WITH TOM HOMAN WITH BLOOMBERG’S IMMIGRATION REPORTER ALICIA CALDWELL, WHO IS THERE RIGHT NOW.WE’LL TALK WITH TYLER KENDALL ABOU ...

Core Viewpoint - President Trump expressed disapproval of a proposal to allow Americans to use their 401(k) savings for home down payments, citing the strong performance of 401(k) accounts as a reason for his opposition [2][6]. Group 1: 401(k) and Home Buying - The average 401(k) balance increased by 9% to $144,400 in Q3, marking an all-time high [2]. - 72% of private-sector workers have access to a retirement plan, with 53% participating in such plans [3]. - Experts caution against using retirement funds for home purchases, viewing it as a last resort and questioning the priorities of those who do [4][22]. Group 2: Affordability and Market Conditions - Affordability remains a significant issue, with everyday costs rising over 25% since January 2020 [5]. - The national median sale price for a single-family home was $409,500 in December, a slight increase of 0.4% year-over-year, but down from a peak of $435,300 in June [9]. - The share of home purchases by first-time buyers has dropped to a record low of 21%, with the average age of first-time buyers now at 40 [10][12]. Group 3: Down Payment Challenges - The median down payment for first-time buyers was 10%, while repeat buyers had a median of 23% [12]. - The median 401(k) balance for those aged 40 is just under $40,000, which may not be sufficient for a substantial down payment [11]. - Personal savings are the primary source for down payments among first-time buyers, with 59% relying on their savings [14]. Group 4: Retirement Account Withdrawal Options - First-time homebuyers can withdraw up to $10,000 from an IRA for a down payment without incurring a penalty [15]. - 401(k) plans typically allow loans up to 50% of the vested balance or $50,000, with repayment terms generally within five years [16]. - Hardship withdrawals from 401(k) plans are permitted in 94% of cases, but they incur taxes and penalties [19].

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Core Viewpoint - J.P. Morgan strategists suggest that the Trump administration's focus on affordability may create investment opportunities in value-oriented stocks ahead of the November midterm elections [1] Group 1: Investment Opportunities - A bullish outlook on low-end consumer sensitive stocks is reiterated, with factors such as fiscal spending, tax cuts, and lower gasoline prices contributing to this sentiment [2] - Stocks identified as benefiting from this trend include SouthWest Airlines, Dutch Bros., Walmart, Dollar Tree, Dollar General, Citigroup, and Chime Financial [2] - Most of these stocks have outperformed the S&P 500 in 2026, indicating potential earnings upside due to affordability-related catalysts [3] Group 2: Policy Changes - An executive order has been signed by Trump to ban large institutional investors from purchasing single-family homes, with further details on implementation still unclear [4] - Trump proposed a cap on credit card interest rates at 10% for one year starting January 20, although the feasibility and legal enforceability of this cap remain uncertain [5] Group 3: Economic Factors - A significant decline in oil prices over the past year has led to lower gasoline prices, with projections indicating that the annual average price may fall below $3 per gallon in 2026 [5] - The reduction in gas prices is expected to provide substantial savings for consumers, estimated at $20-25 billion for the year if gasoline prices average around $2.90 [6]

Core Viewpoint - The U.S. financial technology sector is poised for growth as President Trump's focus shifts to affordability, potentially benefiting fintech companies over traditional lenders [1][2]. Fintech Sector Opportunities - Companies like Affirm Holdings Inc, SoFi Technologies Inc, and Block Inc are well-positioned to capitalize on the affordability trend, according to Citigroup [3]. - Other potential beneficiaries include Toast Inc and Shopify Inc, which are also highlighted for their consumer-friendly services [3]. Traditional Lenders' Response - Traditional lenders initially experienced a rally following Trump's return to the White House, anticipating a more lenient regulatory environment. However, the renewed focus on affordability may shift investor attention towards fintech challengers [4]. Fintech Growth Metrics - Block reported over $200 billion in global lending through its credit products, indicating significant growth in the fintech sector [5]. - SoFi announced a $1.5 billion fundraising plan aimed at enhancing its capital position and supporting future growth [5]. Mixed Outlook on Specific Companies - Kerrisdale has expressed concerns about Affirm, labeling it a "Buy Now, Cry Later" story, suggesting that its rapid growth may reflect underlying risks similar to past subprime lending failures [6]. - Affirm's growth of over 30% in gross merchandise volume since 2022 is noted, but concerns about weakening credit quality due to high-interest rate lending are raised [6]. Reactions to Affordability Initiatives - Trump's affordability initiatives, including blocking institutional investors from acquiring single-family homes, have received mixed reactions, with some praising the efforts while others warn of potential market instability [7]. - The proposed nationwide 10% cap on credit card interest rates could limit access to credit, potentially hindering consumers' ability to build credit and pushing them towards less regulated options [8]. Price Performance - Over the past year, SoFi and Affirm Holdings saw stock price increases of 48.32% and 29.05%, respectively, while Block's stock declined by 25.64% [9].

Core Insights - Inflation is expected to remain high throughout 2026, driven by healthy economic activity and tariff pass-through to consumers [2][3] - Lower-income households will be disproportionately affected by elevated prices of everyday goods and utility costs [3] - Government intervention aimed at affordability is anticipated, especially ahead of midterm elections [4][5] Inflation Outlook - The December 2025 Consumer Price Index indicated a month-over-month price increase of 0.3% and a year-over-year increase of 2.7% [1] - Mukherjee predicts that inflation will not significantly ease in 2026, maintaining pressure on consumers [2] Impact on Consumers - Lower-income consumers are expected to become more cautious with discretionary spending due to a challenging hiring environment [3] - Early-year tax refunds may provide temporary financial relief for these households [3] Government and Policy Interventions - Anticipated tariff rate stabilization and potential reductions could lead to lower prices for imported goods [5] - The Federal Reserve is expected to cut rates by 25 to 50 basis points, which may lower mortgage rates and improve housing affordability [5][6] Housing Market - A more affordable housing market is projected as mortgage rates decrease, potentially boosting refinancing and sales [6]

Tax Burden Overview - Washington, D.C. has the highest per capita tax grab at $14,979, although it does not have the highest tax percentage of income due to non-residents being taxed in their home states [1] - Hawaii has the highest state tax burden at 13.9% of income, followed closely by New York at 13.6% [7][9][10] - California has over $70 billion in unaccounted federal tax dollars under Governor Gavin Newsom, contributing to high state tax burdens [7][24] State-Specific Tax Details - Hawaii's cumulative tax burden includes 4.2% in state income taxes, 2.6% in property taxes, and 7.2% in sales and excise taxes, with unique taxation on gross receipts of businesses [11] - New York City has a complex tax structure with a state income tax rate of 10.9% and additional local income taxes, making it one of the most expensive cities [15][17] - Vermont has the highest property tax rates in the nation at an average of 1.78%, with a progressive income tax rate that reaches 8.75% [20] Taxation Trends and Impacts - High state and local taxes in blue states are a major factor affecting affordability for residents, particularly in large cities [5] - The average federal tax paid per capita by U.S. citizens is approximately $13,800, while the average state and local tax is around $7,100, indicating significant discrepancies [3] - California's high taxes include a top state income tax rate of 13.3% and the highest gas tax in the nation at 90 cents per gallon [29]