OIRA – The Office of Information and Regulatory Affairs, heard of? Me neither. It is an office with the Office of Management and Budget and it oversees government agencies including, Homeland security, State Department, Small Business Administration, EPA and the commerce department. It helps improve communication while minimizing conflicts and duplications. As part of the executive branch OIRA gives the president a method of making sure what is happening in all of these organizations. For 45 years OIRA has operated as a small and obscure but powerful organization that can block regulations from the EPA or the department of transportation. Congress has created separate, independent regulatory agencies that don’t have OIRA oversite meaning the president/executive branch does not have a way of executing enforcement action against these agencies policies. These agencies are mostly money based such as the Federal Trade Commission (FTC), the Federal Communications Commission (FCC), the Securities and Exchange Commission (SEC) and, of course, the Federal Reserve (Fed). These have long been considered independent agencies that have leaders appointed by the president and confirmed by the senate and have freedom to go against the president’s agenda and make fair unbiased, non-political decisions. Recent executive order 14215 removes that independence and puts all of these agencies under OIRA. We’ll see if this order will be enacted and the potential impact of this consolidation particularly when it comes to monetary policy which has a long reputation for stability and independence.
Mortgage Rates – the price of Mortgage-Backed Securities (MBS) whipsawed over the past 2 week in response to tariff announcements which caused an abnormal spike in the 10-year US Treasury note. When the stock market goes down there is a typically a ‘flight to security’ and investors move their money into the bond market, and we see better pricing on MBS and lower yields on the US Treasury. Currently there is turmoil, and it seems that some confidence in the UST has eroded which is not a good sign for mortgage rates. After a week of erosion in the bond market last week saw some bounce back which helped recover some of our losses in pricing. Rates are marginally lower from this time last year.
Inflation – the BLS reported a 0.4% decline inflation with prices up 2.7% year over year. This is a nice decline from last months’ figure of 3.2% The core rate, which strips out food and energy, fell 0.2% to 3.3% year over year.
Retail Sales – the US Census Bureau reported that retail sales were stronger than expected in March rising 1.4%. This could be a quick spirt of buying to get ahead of tariff pricing (auto sales and parts rose 5.3%).
Mortgage Applications to purchase homes fell 5% last week but are up 13% year over year. Refinances fell 12% and are up 68% year over year.