# Market Stress, Housing Slump, and Bond Demand

**Podcast:** WSJ What’s News
**Published:** 2026-02-12

## Transcript

If you're early in your career and looking for insight, inspiration, and honest advice, listen to the Capital Ideas Podcast.
Hear from Capital Group professionals about leaning into the differences that make you unique, making decisions that last, and what it means to lead with purpose.
The Capital Ideas Podcast from Capital Group.
Available wherever you listen.
Published by Capital Client Group Inc.
The Trump administration is ending its immigration surge in Minnesota.
Plus, signs of financial stress are spreading beyond low-income Americans.
The latest data from a trade group that represents credit counselors is showing that more middle-class, middle-income Americans are also falling behind on their bills.
And freezing weather sends home sales diving in January.
It's Thursday, February 12th.
I'm Alex Ossole for the Wall Street Journal.
This is the PM edition of What's News?
The top headlines and business stories that move the world today.
For more on the end of the operation and its impact, I'm joined by WSJ immigration reporter Michelle Hackman.
Michelle, what were the administration's goals in Minnesota and did it achieve them?
Holman framed it that way today.
He said, We've accomplished everything that we've wanted to here in Minnesota.
But if you read between the lines, I think they are actually looking for a way to de-escalate.
They did make a lot of arrests.
It remains to be seen how many of those people will actually be deported.
There's been a lot of tension both in Minnesota and in Washington after federal agents shot and killed U.S.
citizens.
There were protests and the fight over funding for the Department of Homeland Security.
Michelle, let me play you a clip of Minnesota Governor Tim Walls after Homan's announcement.
They left us with deep damage, generational trauma.
They left us with economic ruin in some cases.
They left us with many unanswered questions.
Did the backlash to the administration's policy play a role in the end of the surge?
Absolutely.
You saw the administration do an about face.
They were proud of their work in Minnesota, I would say pretty much up through the shooting of Alex Predi in Minnesota a few weeks ago.
And at that point, criticism of their operations boiled over.
It wasn't just Democrats, it was coming from Republicans saying this looked too chaotic.
So they reversed course.
They put in Tom Holman.
They sort of cut off the chain of command that had already been there in Minnesota.
How have Democrats responded to the announcement that the operation is ending?
Democrats in Minnesota are saying we stood up to ICE and we won.
We drove them out of our state.
The governor of Minnesota, Tim Walls, also noted that local businesses suffered, as the journal has also reported.
What is the economic impact expected to be after immigration agents leave?
I think it's going to be extensive.
You saw immigrants, even citizens of foreign descent, staying home, not working because they were afraid of ICE.
And when people don't go out, it means far fewer people are going to restaurants, going to bars that will take time to recover.
That was WSJ reporter Michelle Hackman.
Thanks, Michelle.
Thank you.
In Washington, Senate Democrats blocked a bill to fund the Department of Homeland Security.
They said negotiations with Republicans to put new restrictions on immigration enforcement hadn't made enough progress.
The failed vote now puts the department on the verge of a shutdown.
A short-term funding measure expires after tomorrow.
To understand where the Senate goes from here, I put in a quick call to Lindsay Wise, a journal reporter covering Congress, who was still in the Senate after the vote.
After this failed vote, the Senate Majority Leader John Soon said that he thought there was no sense in keeping senators here.
They're also expected to be on recess or out of session all of next week.
He was pretty downbeat about the potential for a deal, but he said that if there is a deal reached in the coming days, he's told people to stay flexible and senators should come back quickly within a day or two.
There's actually a sort of lack of urgency over here in Congress right now, in part because this is only one department.
All the rest of the federal government has been funded through September already.
Also, just the way the pay cycle works for most of these federal workers, they're likely to get at least partially paid through the end of this month into early March.
So I think that things will start to um heat up here a little bit more when people start to miss paychecks.
In other political news, Gail Slater, the Justice Department's top antitrust official is leaving her job.
During her 11 months in the role, she clashed with senior officials who sometimes were in favor of more lenient oversight of mergers.
Her departure leaves a leadership vacuum while big cases are going on against major U.S.
companies like Google, Live Nation, Apple, and Visa.
Slater had lost the trust of Attorney General Pam Bondy and other top leaders.
That's according to a person familiar with the Trump administration's thinking.
Slater didn't respond to requests for comment.
The latest data from a trade group that represents credit counselors is showing that more middle class, middle-income Americans are also falling behind on their bills.
And the data from this organization is particularly alarming because credit counseling is typically seen as the last step before bankruptcy.
Credit counselors, they're nonprofits.
It's still seen as a private sector solution.
Before you take it to the courts and get a formal restructuring, what they're seeing is that the average client now makes $70,000.
So that's still considered middle class, middle income.
It's not high income, but bad outcomes are coming for higher and higher earners.
Amani says inflation is making it more difficult for people to stay out of debt.
It's I'm paying for groceries, I'm paying for gas.
And if you are struggling to pay for those things, then what is the first to go?
That would be discretionary spending.
The cost of living is getting higher.
So everything from housing to groceries to other daily essentials, they're unable to stick to the budgets that they've set for themselves.
Coming up, stock markets are sliding.
Investors can't get enough of corporate bonds.
And how the Trump administration tried to get Iranian protesters online.
That's after the break.
Reba here for Realtor.com, the pro's number one most trusted app.
Finding a home is like dating.
You're searching for the one.
With over 500,000 new listings every month, you can find the one today.
Download the Realtor.com app because you're nearly home.
Make it real with Realtor.com.
Pro's number one most trusted app based on August 2025 proprietary survey.
Over 500,000 new listings every month based on average new foresale and rental listings, July 2024 to June 2025.
Stocks dropped sharply today on war concerns about AI.
The NASDAQ led the major benchmarks lower, dropping more than 2%, while the Dow closed back below 50,000.
Market fears have spread in recent weeks over how artificial intelligence could disrupt software companies, publishers, financial services firms, and others.
Meanwhile, Sam Goldfarb, who covers bonds for the journal, says investors can't get enough of them.
You can see the evidence of that in what's called credit spreads.
The higher quality, the investment grade bonds, the yields that you get on them, the gap between those and the yields on ultra-safe US treasuries, those are the tightest spreads that we've seen in almost 30 years.
For more lower rated bonds, it's the tightest spreads uh since like 2007 or so.
That's just a sign of demand for these bonds because they're willing to accept these yields that are not that much higher than what you can get on government bonds, and government bonds are essentially guaranteed to not default.
Sam says that even though there's concerns about an AI bubble, investors have a lot of demand for tech company bonds.
Even though the gap between these two yields on corporate bonds and treasuries is small, you're still getting a pretty high yield on corporate bonds relative to what you can get in other parts of the world.
Investors also think that maybe the Fed will keep cutting interest rates and that these yields will go down in the future, so they want to buy them now while they still can.
And they're relatively optimistic about the economy, and that makes them less concerned about potential defaults.
The company is building these giant data centers to power artificial intelligence models.
They're near needing to borrow a lot to fund those investments.
Investors have all this demand for bonds for reasons we discussed.
So even though the supply is ramping up with this tech borrowing, it's still not too much to overwhelm the demand for them.
Home sales fell 8.4% last month, the biggest monthly decline since February 2022.
Snowstorms and low consumer confidence slowed a housing market that was showing signs of recovery.
Stubbornly high home prices and 30-year mortgage rates that are stuck above 6% are also making buyers more picky.
But the coming months are going to be key to see if the housing market is rebounding.
Many people go house hunting in the spring.
It was an effort to support efforts against the regime than was previously known.
And in another exclusive, we're reporting that a U.S.
warship and a Navy supply vessel collided in the Caribbean yesterday during a ship to ship refueling.
A military spokesman said that two people reported minor injuries and that both ships can keep sailing safely.
The cause and exact location of the incident aren't yet clear.
And that's what's news for this Thursday afternoon.
Today's show is produced by Pierre Biename, Anthony Bancy, and Alexis Moore with supervising producer Tali Arbell.
I'm Alex Ossole for the Wall Street Journal.
We'll be back with a new show tomorrow morning.
Thanks for listening.
We're invested in advancing science, giving adults who smoke better options.
We're invested in American manufacturing, helping local economies thrive.
We're invested in community, supporting military veterans and their families, disaster relief, and economic empowerment.
Because we're proud to be invested in America.
See how at USPMI.com.