Stocks are higher this morning on no real news. Bonds and MBS are flat.
Industrial production fell 0.5% MOM in March according to the Federal Reserve. Manufacturing production declined 0.1%. Capacity utilization declined to 75.7%. The declines were driven by falling consumer goods production.
Independent mortgage banks saw an increase in profit in 2025 according to the MBA. “The average net production profit for IMBs in 2025 reached its highest level in four years at 21 basis points,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “While profits have improved slightly in recent years, they are still less than half the historical average going back to 2008. There was also wide variability between top and bottom performers due to differences in product mix, volume levels, geography and cost efficiencies, among other factors.”
Profits rose to an average of $785 per loan compared to $443 a year ago. “Overall annual production volume was up in 2025, while loan balances rose to new study-highs. Despite the increase in volume, per-loan production costs were slightly higher than in 2024. Historically, when volume picks up, fixed costs are spread over more loans, resulting in a reduction in per-loan costs. However, that was not the case in 2025 as rising wage growth, increases in third-party charges, and reduced application pull-through negatively impacted origination costs. Containing origination costs and increasing efficiencies will remain a differentiator between profitable and unprofitable companies in 2026.”
NY Fed President John Williams worries the war will have a negative effect on inflation. “Assuming energy supply disruptions ease reasonably soon, energy prices should come down, and these effects should partially reverse later this year,” Williams said. “However, the conflict could also result in a large supply shock with pronounced effects that simultaneously raises inflation — through a surge in intermediate costs and commodity prices — and dampens economic activity. This has begun to play out already.”
