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Lowe’s is buying Foundation Building Materials, a distributor of drywall, insulation and other products, for approximately $8.8 billion as the home improvement retailer intensifies its focus on professional builders.FBM also provides metal framing, ceiling systems, commercial doors and hardware and other products that serve large residential and commercial professionals in both new construction and repair and remodel applications. It has more than 370 locations in the United States and Canada serving 40,000 professional customers.The acquisition is part of Lowe’s move to provide more options for professional builders. The Mooresville, North Carolina-based company recently closed on its $1.3 billion acquisition of Artisan Design Group, a provider of design, distribution and installation services for interior surface finishes, including flooring, cabinets and countertops, to home builders and property managers.Rival Home Depot has been making similar moves. In June the home improvement retailer announced that it was buying specialty building products distributor GMS for $4.3 billion.GMS Inc. of Tucker, Georgia, is a distributor of specialty building products like drywall, steel framing and other supplies used in both residential and commercial projects.Home Depot’s acquisition of GMS came after it purchased SRS Distribution, a materials provider for professionals, last year for more than $18 billion including debt. SRS provides materials for professionals like roofers, landscapers and pool contractors.Neil Saunders, managing director of GlobalData, said that the professional builder market provides a growth opportunity to both Home Depot and Lowe’s as there’s a lot of spending in the segment.“Pro is basically the new battleground for home improvement,” he said. “Naturally, with two big giants in the arena, there are likely to be some bruising battles ahead. However, at this stage, we believe the market is big enough and fragmented enough to allow both players to extract some wins.”Lowe’s deal for FBM is expected to close in the fourth quarter.Aside from the acquisition, Lowe’s reported its fiscal second-quarter financial results on Wednesday. The company posted an adjusted profit of $4.33 per share, which topped the $4.23 per share that analysts polled by Zacks Investment Research expected.Revenue totaled $23.96 billion in the period, which met Wall Street’s expectations.Lowe’s raised its full-year sales outlook to a range of $84.5 billion to $85.5 billion. It previous predicted sales would be between $83.5 billion and $84.5 billion for the year.The company’s stock rose more than 3% before the market open. Michelle Chapman, AP Business Writer
Category:
E-Commerce
President Donald Trump this week called on a Federal Reserve governor to resign over an accusation of mortgage fraud, the latest effort by his administration to exert greater control over one of the few remaining independent agencies in Washington.Federal Reserve governor Lisa Cook says she won’t leave her post.Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him. Powell, who will speak Friday at an economic symposium in Jackson Hole, Wyoming, says the Fed wants to see how the economy responds to Trump’s sweeping tariffs on imports, which Powell says could push up inflation.Powell’s caution has infuriated Trump, who has demanded the Fed cut borrowing costs to spur the economy and reduce the interest rates the federal government pays on its debt. Trump has also accused Powell of mismanaging the U.S. central bank’s $2.5 billion building renovation project.Firing the Fed chair or forcing out a governor would threaten the Fed’s venerated independence, which has long been supported by most economists and Wall Street investors. Here’s what to know about the Fed: Why the Fed’s independence matters The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls which it typically does when the economy falters the Fed can make borrowing cheaper and encourage more spending, accelerating growth and hiring. When it raises the rate which it does to cool the economy and combat inflation it can weaken the economy and cause job losses.Economists have long preferred independent central banks because they can more easily take unpopular steps to fight inflation, such as raise interest rates, which makes borrowing to buy a home, car, or appliance more expensive.The importance of an independent Fed was cemented for most economists after the extended inflation spike of the 1970s and early 1980s. Former Fed Chair Arthur Burns has been widely blamed for allowing the painful inflation of that era to accelerate by succumbing to pressure from President Richard Nixon to keep rates low heading into the 1972 election. Nixon feared higher rates would cost him the election, which he won in a landslide.Paul Volcker was eventually appointed chair of the Fed in 1979 by President Jimmy Carter, and he pushed the Fed’s short-term rate to the stunningly high level of nearly 20%. (It is currently 4.3%). The eye-popping rates triggered a sharp recession, pushed unemployment to nearly 11%, and spurred widespread protests.Yet Volcker didn’t flinch. By the mid-1980s, inflation had fallen back into the low single digits. Volcker’s willingness to inflict pain on the economy to throttle inflation is seen by most economists as a key example of the value of an independent Fed. Investors are watching closely An effort to fire Powell would almost certainly cause stock prices to fall and bond yields to spike higher, pushing up interest rates on government debt and raising borrowing costs for mortgages, auto loans, and credit card debt. The interest rate on the 10-year Treasury is a benchmark for mortgage rates.Most investors prefer an independent Fed, partly because it typically manages inflation better without being influenced by politics but also because its decisions are more predictable. Fed officials often publicly discuss how they would alter interest rate policies if economic conditions changed.If the Fed was more swayed by politics, it would be harder for financial markets to anticipate or understand its decisions. The Fed’s independence doesn’t mean it’s unaccountable Fed chairs like Powell are appointed by the president to serve four-year terms, and have to be confirmed by the Senate. The president also appoints the six other members of the Fed’s governing board, who can serve staggered terms of up to 14 years.Those appointments can allow a president over time to significantly alter the Fed’s policies. Former president Joe Biden appointed four of the current seven members: Powell, Cook, Philip Jefferson, and Michael Barr. A fifth Biden appointee, Adriana Kugler, stepped down unexpectedly on Aug. 1, about five months before the end of her term. Trump has already nominated his top economist, Stephen Miran, as a potential replacement, though he will require Senate approval. Cook’s term ends in 2038, so forcing her out would allow Trump to appoint a loyalist sooner.Trump will be able to replace Powell as Fed chair in May 2026, when Powell’s term expires. Yet 12 members of the Fed’s interest-rate setting committee have a vote on whether to raise or lower interest rates, so even replacing the Chair doesn’t guarantee that Fed policy will shift the way Trump wants.Congress, meanwhile, can set the Fed’s goals through legislation. In 1977, for example, Congress gave the Fed a “dual mandate” to keep prices stable and seek maximum employment. The Fed defines stable prices as inflation at 2%.The 1977 law also requires the Fed chair to testify before the House and Senate twice every year about the economy and interest rate policy. Could the president fire Powell before his term ends? The Supreme Court earlier this year suggested in a ruling on other independent agencies that a president can’t fire the chair of the Fed just because he doesn’t like the chair’s policy choices. But he may be able to remove him “for cause,” typically interpreted to mean some kind of wrongdoing or negligence.It’s a likely reason the Trump administration has zeroed in on the building renovation, in hopes it could provide a “for cause” pretext. Still, Powell would likely fight any attempt to remove him, and the case could wind up at the Supreme Court. Christopher Rugaber, AP Economics Writer
Category:
E-Commerce
Just three weeks ago, Federal Reserve Chair Jerome Powell spoke to reporters after the central bank had kept its key interest rate unchanged for a fifth straight meeting and said the job market was “solid.”His assessment was important because if the job market is healthy, there is less need for the Fed to cut its key interest rate, as President Donald Trump has demanded. Two days later, the Labor Department issued a report that cast doubt on that assessment, showing hiring was weak in July and much lower than previously estimated in May and June.So, there will be a lot of attention paid by Wall Street and the White House to Powell’s high-profile speech Friday at the Fed’s annual economic symposium in Jackson Hole, Wyoming. If the famously data-dependent Powell shifts gears and takes a gloomier view of the job market, that could open the door for a rate cut at the Fed’s next meeting in September.Powell could also stick to the cautious approach he’s maintained all year and reiterate that the central bank needs more time to evaluate the impact of Trump’s sweeping tariffs on inflation.Most economists expect Powell to signal that a rate cut is likely this year, but won’t necessarily commit to one next month. That could disappoint Wall Street, which has put high odds on a September cut.Powell’s speech, his last address at Jackson Hole as chair before his term ends in May, will occur against a particularly fraught backdrop. About a week after the jobs numbers, the latest inflation report showed that price growth crept higher in July. Core prices, which exclude the volatile food and energy categories, rose 3.1% from a year ago, above the Fed’s 2% target.Stubbornly elevated inflation pushes the Fed in the opposite direction that weak hiring does: It suggests the central bank’s short-term rate should stay at its current 4.3%, rather than be cut. That would mean other borrowing costs for mortgages, auto loans, and business loans, would stay elevated.“So the plot has thickened,” said David Wilcox, a former top Fed economist and now director of economic research at Bloomberg Economics and also a senior fellow at the Peterson Institute. “The dilemma that the Fed is in has become, if anything, more intense.”Powell is also navigating an unprecedented level of public criticism by Trump, as well as efforts by the president to take greater control of the Fed, which has long been independent from day-to-day politics.Most observers credit Powell for his nimble handling of the pressures. An iconic moment in his tenure was Trump’s visit to tour the Fed’s renovation of its office buildings last month. Trump had charged that Powell mismanaged the project, which had ballooned in cost to $2.5 billion, from an earlier estimate of $1.9 billion.With both the president and Fed chair in white hard hats on the building site, in front of cameras, Trump claimed the cost had mushroomed even further to $3.1 trillion. Powell shook his head, so Trump handed him a piece of paper purporting to back up his claim.Powell calmly dismissed the figure, noting that the $3.1 billion included the cost of renovating a third building five years earlier.“That was just such a classic Powell,” said Diane Swonk, chief economist at KPMG. “He just doesn’t get fazed. He’s got a humility that oftentimes I think is lacking among my colleagues in economics.”Powell appeared to at least temporarily assuage Trump during the tour, after which the president backed off his threats to fire the Fed chair over the project.The attacks from Trump are the latest challenges for Powell in an unusually tumultuous eight years as Fed chair. Not long after being appointed by Trump in 2018, Powell endured the president’s criticisms as the Fed slowly raised its key rate from the low levels where it had remained for years after the 2008-2009 Great Recession.Powell then found himself grappling with the pandemic, and after that the worst inflation spike in four decades that occurred as government stimulus checks fueled spending while crippled supply chains left fewer goods available.Powell then oversaw a rapid series of rate hikes that were widely predicted to cause a recession, but the economy continued plugging ahead.In his latest attempt to pressure the Fed, on Wednesday Trump called on Fed governor Lisa Cook to step down, after an administration official, Bill Pulte, accused her of mortgage fraud. Pulte is head of the agency that regulates mortgage giants Fannie Mae and Freddie Mac.Cook said in a statement that she wouldn’t be “bullied” into resigning and added that she was preparing to answer the charges.For Powell, there’s a difficult decision to make on interest rates. The Fed’s “dual mandate” calls for it to keep prices stable while seeking maximum employment. But while the weak jobs data suggest the need for a cut, many Fed officials fear inflation will get worse in the coming months.“There is still a fair amount that’s still outstanding,” Raphael Bostic, president of the Fed’s Atlanta branch, said in an interview, referring to tariff-led price hikes. “One feedback we’ve gotten both in our surveys and from direct conversations (with businesses) suggests that many still are looking to see the price that they charge their customers increase from where we are today.”Other economists, however, point to the sharp slowdown in housing as a sign of a weak economy. The housing market remains mired in a slump partly due to elevated mortgage rates, even though sales of existing homes did rise in July. Consumer spending has also been modest this year, and growth was just 1.2% at an annual rate in the first half of 2025.“There’s not a lot to like about the economy right now outside of AI,” said Neil Dutta, an economist at Renaissance Macro. “The weakness in the economy isn’t about tariffs,” but instead the Fed’s high rates, he added. Christopher Rugaber, AP Economics Writer
Category:
E-Commerce
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