Hochul Bares Details On Second-Home Tax.
• The tax would apply to an estimated 10,000 homes, Hochul’s office said on Thursday, down from an initial estimate of 13,000 homes.
The larger figure was based on older data, a spokeswoman said.
• Still, Hochul expects that the pied-à-terre tax would raise $500 million even with fewer homes taxed,
her office said, which is the same figure she estimated initially.
• For the first two years, a tax of between 4% to 6.5% would apply to apartments with a so-called market value of $1 million or more.
• The market value tends to be much lower than what a home actually sells for.
The governor’s office estimates that a $1 million market value would translate to a $5 million sales value.
• After two years, second homes would be taxed at a considerably lower rate and wouldn’t be assessed by market value.
9 Out of 10 People Say: “Now is the Worst Time to Buy a Home”.
• Amid surging housing prices and rent costs, voter dissatisfaction is growing.
• According to a survey recently released by the Bipartisan Policy Center (BPC),
88% of respondents answered that “now is the most difficult time to buy a home.”
This survey was conducted last April among 1,000 registered voters nationwide,
in partnership with the polling firm Morning Consult.
• This survey comes as the federal Congress discusses the “Housing for the 21st Century Act,”
which is being evaluated as the largest large-scale housing reform bill in decades
• One of the core points of contention in the bill is the restriction on large institutional investors owning single-family homes.
The Senate and House bills include a provision that prohibits institutional investors from owning more than 350 single-family homes.
Regarding this, approximately 70% of respondents answered that they agree with the intent of restricting institutional investors.
Companies’ New Issue: Too Many AI Agents.
• Companies including Lyft , DaVita and GitLab are navigating the challenge of AI agent proliferation
—hoping to tamp down on the problem without discouraging AI use, they told The Wall Street Journal.
• The issue, known as “AI agent sprawl,” stems partly from how easy it is for
even nontechnical employees to create these independent AI bots, thanks to platforms like Anthropic’s Claude Cowork.
OpenClaw, an open-source tool that orchestrates multiple agents, has also added to the popularity of agents at work.
• In the next two years, the average global Fortune 500 enterprise will run over 150,000 AI agents,
according to market research and IT consulting firm Gartner.
But only 13% of organizations think they have adequate AI agent governance in place, Gartner said.
Economy Tests Warsh’s Plans for the Fed.
• Kevin Warsh won the Fed chair nomination with
a double- barreled policy agenda for the central bank: lower interest rates and a smaller Fed balance sheet.
As he takes the reins, economic conditions will make it tough for him to achieve either of those goals.
• A troubling rise in inflation over the past two months has left Fed policymakers
in no mood to deliver the rate cuts President Trump has wanted.
The job market has shown signs of stabilizing, further undercutting the case for easing.
• Warsh’s other aim, a smaller Fed presence in financial markets, looks challenging too.
Other Fed officials who share that objective have acknowledged it is likely to be a delicate, slow-moving project.
Inflation Accelerated to 3.8% in April.
• Prices took biggest jump in three years, with gasoline, coffee particular pain points.
• Consumer prices rose 3.8% in April from a year earlier, a clear impact of higher gasoline prices
since the war with Iran started and the latest sign that Federal Reserve rate cuts are unlikely this year.
• The figures, reported Tuesday by the Labor Department,
surpassed the previous month’s reported increase of 3.3%. Economists polled by WSJ expected inflation of 3.7%.
The April increase was the highest in three years.
• “The American economy has entered a new chapter where inflation appears to have stepped up,”
said Joseph Brusuelas, chief economist at RSM. He predicted the headline rate moving to 4% later this year.
“Median American families are going to find it very challenging to adjust going into the second half of the year.”
Fed Official Flags Conditions for a Rate Hike.
• Boston Fed President Susan Collins flagged the possibility that the central bank might need to raise interest rates
if inflation pressures broaden in coming months,
even though that isn’t currently her most likely outlook for the American economy.
• Collins pointed to three factors that could help determine whether the Federal Reserve would need to raise rates.
Most important, she said, are households’ and businesses’ expectations of future inflation,
which have drifted to the high end of their historical range.
• Collins said she was also watching whether price pressures spread beyond energy to other goods and services,
and the extent to which tariffs continue to pass through the price chain.
• Collins, who doesn’t have a vote on the Fed’s rate-setting body this year,
said she supported removing language at last month’s meeting suggesting the next rate move would be a cut.
Space Data Centers Face Lots of Challenges
• Nvidia recently posted a job straight out of a science-fiction epic: orbital data-center system architect.
• The chip maker and other technology giants are working to take an idea that has captivated futurists
—channeling the sun’s power through spacecraft to support activity on Earth— and make it reality for AI computing.
• Elon Musk has recast much of SpaceX’s future around operating AI data centers in space.
Jeff Bezos’ Blue Origin envisions building a big business doing the same,
while Alphabet’s Google and Planet Labs are working on a mission to test how satellites would run AI computing systems.
• A big part of the challenge is producing and launching scores of the devices without breaking the bank.
Some engineers don’t believe the math works, and big questions remain unanswered.
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