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Under Trump, the Small Business Administration Clamps Down

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For entrepreneurs who want a loan, a government contract or just some advice, the Small Business Administration is generally a first stop. But over the past few months, getting the agency’s help has become more difficult.Under its administrator, Kelly Loeffler, a corporate executive turned senator from Georgia and vocal supporter of President Trump, the agency has aggressively cut staff. It is rolling back changes made during the Biden administration aimed at easing access to credit for the smallest enterprises, and has lowered targets for how much the federal government should buy from them.The changes are especially problematic for Black, Hispanic and immigrant entrepreneurs. In the name of eradicating diversity, equity and inclusion practices, the Small Business Administration is shedding programs aimed at helping disadvantaged businesses, including those run by women.While banks that administer the S.B.A.’s major loan programs have welcomed some of the changes, Democrats and small-business advocates have decried them — especially as the agency is also supposed to inherit a $1.66 trillion student loan portfolio from the largely dismantled Education Department.“It’s unconscionable that the Trump administration would treat such a vital agency so callously,” said Senator Edward J. Markey of Massachusetts, the ranking Democrat on the Senate Committee on Small Business and Entrepreneurship. He noted that Ms. Loeffler had ignored his requests for information about the changes. “They’re destroying the areas where they do have expertise and it’s vital to invest, and then moving over areas where the agency is going to wind up overwhelmed,” Mr. Markey said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    How India Is Trying to Squeeze Pakistan Far From the Battlefield

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    The nuclear-armed rivals are also wrangling over Pakistan’s access to desperately needed foreign aid, as India explores ways to use its soft power and relationships to bedevil its old enemy.Even as India was gearing up to use its military to strike at Pakistan this week, calling it revenge for a terrorist strike in Kashmir last month, the government was pursuing other forms of power projection as well: bloodless and more refined, and mostly aimed at Pakistan’s economic vulnerability.On Friday, May 9, the executive board of the International Monetary Fund is scheduled to meet three blocks from the White House. Indian officials have suggested that they will make a new case there: that the Fund should refuse the extension of a $7 billion loan to Pakistan described as crucial to getting the country on more solid footing financially and to fund desperately needed services for its people. And though Indian officials will not confirm it, other potential sources of Pakistani aid may also be in India’s sights, according to domestic media reports.In two weeks before its strikes against Pakistan on Wednesday, India was already testing new ways to aggrieve its old enemy.On April 23, India pulled out of a river-sharing treaty that has safeguarded Pakistan’s vulnerable water supply since 1960. Pakistan called it an act of war.India turned to its softer power, as well. As tensions rose after the terrorist attack in Kashmir, India tinkered with its internet controls to cut off Pakistani musicians and cricketers from their audiences on Indian social media, much as it blocked Indians from using Chinese-owned TikTok after a clash with China in 2020.India also announced that it would sever all trade between the two countries. In practice, there wasn’t much to begin with. India exports mainly sugar, medicines and some other chemicals to Pakistan. Some Indian exporters said they never got a legal notice from the government — so they are still fulfilling contracts.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    IMF Expects Trump’s Tariffs Will Slow Global Economic Growth

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    President Trump’s trade war is expected to slow economic growth across the globe this year, in large part because his aggressive use of tariffs is likely to weigh heavily on the United States, the world’s largest economy.The economic projections were released on Tuesday by the International Monetary Fund, in the wake of Mr. Trump’s decision to raise tariffs to levels not seen since the Great Depression.The president has imposed a 10 percent tariff on nearly all imports, along with punishing levies of at least 145 percent on Chinese goods that come into the United States. Mr. Trump also imposed what he calls “reciprocal” tariffs on America’s largest trading partners, including the European Union, Japan, South Korea and Taiwan, although he has paused those until July as his administration works to secure bilateral trade deals.Mr. Trump’s approach has created paralyzing uncertainty for U.S. companies that export products abroad or rely on foreign inputs for their goods, dampening output just as economies around the world were stabilizing after years of crippling inflation. China and Canada have already retaliated against Mr. Trump’s tariffs with their own trade barriers, and the European Union has said it is prepared to increase levies if the United States goes ahead with its planned 20 percent tax.The World Economic Outlook report projects that global output will slow to 2.8 percent this year from 3.3 percent in 2024. In January, the fund forecast that growth would hold steady in 2025.The I.M.F. also expects output to be slower next year than it previously predicted.Much of the downgrade for this year can be attributed to the impact of the tariffs on the U.S. economy, which was already poised to lose momentum this year. The I.M.F. expects U.S. output to slow to 1.8 percent in 2025, down from 2.8 percent last year. That is nearly a full percentage point slower than the 2.7 percent growth that the I.M.F. forecast for the United States in January, when it was the strongest economy in the world.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Investors Seeking Safety Look to German Government Bonds

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    Germany has long taken flak from Wall Street and financial capitals around Europe for the extreme fiscal conservatism that has kept the country’s debt levels low. But as global markets convulsed this week, investors rewarded Germany’s caution by snapping up its government bonds, which are known as bunds.Investors have reeled after President Trump imposed 10 percent tariffs on nearly every trading partner, temporarily rescinded even higher “reciprocal” tariffs hours after they came into effect and steadily ratcheted up tariffs on China to well above 100 percent.The resulting tumult hit U.S. assets hard, including Treasuries and the dollar, normally considered haven assets. That sent investors seeking other places for safety, such as gold, the Swiss franc and German bunds.The 10-year yield on German bunds, which moves inversely to prices, fell to 2.56 percent, near its lowest level in more than a month. That is notable relative to the 10-year U.S. Treasury yield, arguably the most important interest rate in the world, which has soared higher. On Friday, the 10-year U.S. yield was around 4.5 percent, climbing nearly half a percentage point in one week, a huge move in that market.Germany’s strict limits on government borrowing have given the country a stellar AAA credit rating. But last month, lawmakers decided that the next government could abandon the borrowing limit and take on trillions of euros in fresh debt to bolster the country’s military and crumbling public infrastructure. Germany’s export-driven economy is also heavily exposed to tariffs, given the large amount of trade its automakers and other industrial companies do with the United States.The prospect of extra borrowing and a slowing economy had begun to put pressure on German bunds. But the turmoil elsewhere in recent weeks prompted investors to turn back to the country’s debt as a source of safety.This week, Germany’s expected next chancellor, Friedrich Merz, also announced the blueprint for his government, which included an economic plan to jump-start the ailing German economy. And ahead of its planned borrowing binge, Germany benefits from low debt relative to the size of its economy, at about 60 percent of gross domestic product. By comparison, U.S. debt is about 120 percent of the size of its economy.It was “very striking” that in a moment of stress German bunds were acting as the “haven of choice” instead of U.S. Treasuries, said Sander Tordoir, chief economist at the Centre for European Reform, a research institute.“There does seem to be a real safety premium now being place on German government debt,” he said. More

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    Bond Market Sell-Off Prompts Bank of England to Make Unusual Move

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    The Bank of England ditched its plan to sell some of its holdings of long-term bonds next week, after U.S. Treasuries led a rout in the global government bond market.Stock markets have taken a hit since President Trump announced steep tariffs on dozens of countries, but the turmoil also swept into the bond market this week. Yields on U.S. Treasuries, which move in the opposite direction to prices, jumped higher as investors sold the assets traditionally considered a haven in turbulent times.Mr. Trump on Wednesday paused some of his tariffs, saying the markets were getting “yippy.” The U.S. government bond market is enormous and can influence moves in other assets around the world.Yields on British government bonds, known as gilts, have jumped higher in recent days, particularly long-dated debt. The yield on the 30-year gilt soared to 5.58 percent on Wednesday, the highest since 1998.Even as the yield came down somewhat on Thursday, the Bank of England said it would sell 750 million pounds, or $970 million, from its holdings of short-term bonds instead of longer-maturing ones “in light of recent market volatility.”Since late 2022, the Bank of England has been selling bonds that it bought to bolster the economy during the 2008 financial crisis and the coronavirus pandemic. The plan got off to a rough start: It was delayed when the central bank stepped back in to buy bonds to halt the turmoil triggered when former Prime Minister Liz Truss proposed an aggressive tax-cutting budget that incited market chaos.Andrew Bailey, the Bank of England governor, has previously said that there would be a “high bar” for changes to its plan for gilt sales outside of the regular annual review process.The adjustment to the schedule on Thursday is an unusual move. The bank will sell the same amount of bonds. But by offloading short-term debt the pressure is reduced on long-term bonds — selling of those bonds by other investors has been the most intense and raised interest rates for government borrowing.Long-dated gilt sales will be rescheduled for next quarter, the central bank said. It owns £621 billion in gilts, down from £875 billion at its peak in early 2022. More

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    Bond Sell Off Raises Questions About U.S. Safe Haven Status

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    A sharp sell-off in U.S. government bond markets and the dollar has set off fears about the growing fallout from President Trump’s tariffs, raising questions about what is typically seen as the safest corner for investors during times of turmoil.Yields on 10-year Treasuries — the benchmark for a wide variety of debt — whipsawed on Wednesday after Mr. Trump paused the bulk of the levies he had threatened the week before and raised the rates charged on Chinese goods after that country retaliated. The reversal sent U.S. stocks soaring.After the announcement, the 10-year bond traded at 4.35 percent, slightly lower than earlier in the day but still well above recent levels. Just a few days ago, it had traded below 4 percent. Yields on the 30-year bond reversed an earlier rise that had lifted it above 5 percent. It now stands at 4.74 percent. Selling intensified for short-term government bonds, with the two-year yield surging nearly 0.2 percentage points to 3.9 percent.Amid the tumult, other markets considered alternative safe havens to the United States have gained. Yields on German government bonds, which serve as the benchmark for the eurozone, fell on Wednesday, indicating strong demand. Gold prices rose, too.The U.S.-centric volatility comes on the heels of investors fleeing riskier assets globally in what some fear had parallels to an episode known as the “dash for cash” during the pandemic, when the Treasury market broke down. The recent moves have upended a longstanding relationship in which the U.S. government bond market serves as a safe harbor during times of stress.Adding to Wednesday’s angst was the fact that the U.S. dollar, which is the world’s dominant currency and was largely expected to strengthen as Mr. Trump’s tariffs came into effect, had instead weakened. It shaved some of those losses after the administration’s announcement.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    American Wealth Is at a Record High. Sentiment Is Low, and Falling.

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    America is more prosperous than ever.U.S. household net worth reached a new peak at the end of 2024. The unemployment rate has levitated just above record lows for three years. The overall debt that households are carrying compared with the assets they own is also near a record low.But even a land of plenty has its shortcomings, influencing both perceptions and realities of how Americans are doing.The U.S. economy remains deeply unequal, with vast gaps in wealth and financial security persisting even as inflation has ebbed and incomes have risen. And data designed to capture the overall population may be obscuring challenges experienced by a broad range of Americans, especially those in the bottom half of the wealth or income spectrum. More

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    How Fed Rates Influence Mortgages, Credit Cards, Savings and More

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    The Federal Reserve is expected to keep its key rate steady on Wednesday, after a series of cuts that lowered rates by a full percentage point last year.That means consumers looking to borrow are likely to have to wait a bit longer for better deals on many loans, but savers will benefit from steadier yields on savings accounts.Economists don’t expect another rate cut for a while, as the central bank waits for more clarity on an increasingly uncertain outlook given President Trump’s policies on tariffs, immigration, widespread federal job cuts, among other things.The Fed’s benchmark rate is set at a range of 4.25 to 4.5 percent. In an effort to tamp down sky-high inflation, the central bank began lifting rates rapidly — from near zero to above 5 percent — between March 2022 and July 2023. Prices have cooled considerably since then, and the Fed pivoted to rate cuts, lowering rates in September, November and December.More recently,Mr. Trump’s inflation-stoking polices could prompt the Fed to delay more rate cuts. But at the same time, longer-term interest rates set by the markets have been drifting down, influencing a wide range of consumer and business borrowing costs.Here’s what to watch for in five areas of your financial life:Auto RatesCredit CardsMortgagesSavings Accounts and C.D.sStudent LoansWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Existing-Home Sales in 2024 Were Slowest in Decades Amid High Mortgage Rates

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    The market perked up late in the year when interest rates eased, but affordability challenges yielded the fewest transactions since 1995.High interest rates kept U.S. home sales in a deep freeze for much of last year. It could be a while before the market experiences much of a thaw.Americans bought just over four million previously owned homes last year, the National Association of Realtors said on Friday. That was the fewest since 1995 and far below the annual pace of roughly five million that was typical before the coronavirus pandemic.Sales picked up a bit toward the end of the year, rising 9.3 percent in December from a year earlier. That increase probably reflected the dip in mortgage rates in the summer and early fall — to about 6 percent on average for a 30-year fixed-rate mortgage — which made homes more affordable for buyers.But mortgage rates have since rebounded to about 7 percent, and most forecasters don’t expect them to come down much in the next few months. That makes a significant increase in home sales unlikely this year, said Charlie Dougherty, an economist at Wells Fargo.“You saw sales beginning to perk up a little bit, but it’s still sluggish,” he said. “I don’t think it’s indicative of a really forceful or energetic recovery that’s going to be coming.”Home prices soared during the pandemic, as Americans sought more space and rock-bottom interest rates made it easy to borrow. Real-estate agents told of frenetic bidding wars as buyers competed for available homes.That frenzy suddenly stopped when the rapid increase in inflation led the Federal Reserve to raise interest rates to their highest level in decades. Interest rates on a 30-year fixed-rate mortgage jumped, from below 3 percent in late 2021 to nearly 8 percent two years later.The combination of high prices and high interest rates made homes unaffordable for many seeking to buy. And owners, many of whom had either bought their homes or refinanced their mortgages when rates were low, had little incentive to sell. That kept inventories low and prices high.There are hints that the housing market might gradually be returning to normal, as life events — new jobs, new babies, marriages, divorces — force owners to sell, and as buyers adjust to higher borrowing costs. Inventories have edged up, and surveys show more owners plan to sell.But unless mortgage rates fall, that normalization process is likely to be slow, Mr. Dougherty said.“I think it’s probably safe to say that home sales have found a floor,” he said. But, he added, “if you look at the overall level, it’s still very, very weak.” More