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Our lane and sticking to it. The guts of how this economy works is where we start today.

From American public media, this is Marketplace. This program, as I've said a couple of times over the past couple of weeks, cannot and will not chase every pronouncement that comes out of the White House.

We can and will, though, cover decisions by the Trump administration that are of systemic economic importance, which is how we find ourselves starting today with an executive order entitled Ensuring Accountability for All Agencies, in which President Trump claims for himself direct control over key agencies in this economy. Think the Federal Trade Commission, the Securities and Exchange Commission, the Fed, agencies that have traditionally and congressionally exercised independent authority.
Sarah Binder is a professor of political science at George Washington University. Professor, welcome to the program.
Good to have you on. Great.
Thanks for having me. With the understanding that Congress did set up these agencies as independent agencies, I guess the first question is, can the president do what he is purporting to do here? Well, the president can do it if nobody stops him, right? It's a power grab, this time at the expense of what we call these independent agencies.
The question is, will anyone in Congress stand up to him? And at some point, this will certainly end up before the federal courts. And so will the courts be able to constrain the president? That we just don't know.
Help us understand, would you, why Congress decided decades and decades ago that this economy needs independent regulatory agencies to to help this economy run? Well, keep in mind that the very first of these independent agencies were really the end of the 19th century. And it was a period like today of pretty high partisanship, right? Intense electoral competition, frequent shifts in party control.
So progressives are looking for ways to insulate these sort of implementers of law from politics and especially from presidential whims. And so the solution is, Congress says, let's find a way to insulate the decision makers, right, who the leaders are and how they wield their power, but also the decision making, like how much review is done by Congress and the president and the courts over these agencies.
It will not surprise you, even though this order purports to cover the Federal Trade Commission, the Federal Communications Commission and the SEC and a bunch of them, my eyes went to the Federal Reserve and that section that is in this order saying this covers the Federal Reserve except for its monetary policy operations. The catch, of course, with the Fed is they do lots of other stuff that stabilizes this economy, right? They are famously the lender of last resort in a crisis.
And I guess I wonder how concerned you are about the gray areas that have to do with the guts of this economy. Well, that is quite problematic because it's really hard to say, even on something like emergency lending, like where does monetary policy start and where does reg and supervision and regulation, where does that begin? So emergency lending, the stabilize in a financial crisis.
Well, that's also part of the Fed's ability to try to control inflation.

So it's hard to say where are the boundaries of where the president is going to be sticking his nose into those decisions.

And of course, right, we expect the Fed, the Congress tells the Fed, you are in charge of financial stability.

At least one of the agencies in charge is financial stability. And the Fed uses monetary policy, right, to meet that regulatory goal.
So I think there's a lot of question marks from that executive order about how much autonomy the Fed really can keep with letting the president and OMB anywhere into its decision making. Step back for a minute here then and talk about the other and the many institutions of this economy that are now going to be subject to much more direct presidential control.
What is at stake for this economy? Well, the first thing at stake is that it will make it harder for the Fed to keep its eyes on and try to control inflation, which still isn't down to its 2% target, but also some general sense of financial stability, that banks are being regulated across the board, big banks, small banks, community banks, but even-handedly. And I think whenever you have some stronger tinge of presidential control, people are going to wonder, like, is that a legitimate exercise of power? Am I better off? Do I know what's going to happen in the future? And certainly in the economic realm, that's put at risk by injecting presidential and partisan interests into the decision making of these agencies.
Do you think this is a legitimate exercise of presidential power? Well, I think it grabs power from Congress, who set up the rules of these agencies in the first place, I think, in my

view, is patently unconstitutional, right? Because the executive order would allow the

executive branch to decide, how are you going to spend that money, right? Those are decisions

that Congress either gives to the agency or certainly sets the budget for many of them

and expects those monies to be spent in the ways Congress directs. So grabbing that power

seems to me you've taken an equal branch's key authority. You've just taken it away.
Let me take it sideways for a second since you went there. Are you surprised that the Article I branch, that is to say the Congress, is letting its power be taken so easily by the Article II branch, the executive? Well, when I teach undergrads, Congress, we always start, it's Article 1.
Why is it there? It's the most important institution, but it has to stand up for itself. The Constitution, it doesn't protect itself.
It's not self-enforcing. And so this is not the first time that Congress has sort of stepped back and watched as presidents have encroached on their powers.
Sometimes Congress does it on purpose. Hey, president, here's some power to give sanctions.
Here's some power to negotiate trade deals and so forth. Tariffs also, oh, by the way, right? For sure.
For sure. And Congress does that explicitly.
Much of this is Congress is doing, but certainly this is Trump really, really going much farther than we've ever seen other presidents do.

Sarah Binder, she's at Brookings.

She's also at GW.

Professor, thanks for your time, Em. I appreciate it.

Thanks for having me.

Wall Street midweek with all the politics of this economy.

Still fine.

We'll have the details when we do the numbers. It's been downright cold across much of the country the past couple of months, which helps account for what I'm about to tell you.
Housing starts, just like it sounds, and the number of new homes for which ground was broken fell 9.8% between December and January. But weather aside, there are other signs that homebuilders aren't feeling quite so great about things right now.
The National Association of Homebuilders Confidence Index is the lowest it's been in five months. Mortgage rates, as we know, are stuck near 7 percent.
And tariffs are, of course, in the offing. Marketplace's Henry Epp is on the homebuilder uncertainty beat for us today.
The NAHB did its survey right around the time President Donald Trump proposed and then paused 25 percent tariffs on imports from Canada and Mexico. So that really weighed on homebuilder sentiment.
But builders are hoping for some good news, too, says Odetta Cushy, deputy chief economist at First American. They're also thinking that there might be a better regulatory climate for building.
That's the case for Bart Frisbee, president of Sterling Homes in Vermont, a state where lawmakers have loosened some permitting laws in the last few years to encourage more housing construction. Frisbee has a couple projects in the pipeline, including a brand new 32-home neighborhood.
We're optimistic. The market's going to keep on rolling forward.
But a lot of his lumber comes from Canada. So if President Trump puts an import tax on that...

It will increase the price of houses dramatically. And that's the last thing we need is to raise prices.
Because a lot of prospective homebuyers are staying on the sidelines, with mortgage rates around 7%, says Susan Wachter, a professor at the University of Pennsylvania. Yeah.

Builders are meeting price resistance in the market.

And there's not much that builders can do because their costs are going up. Still, there's a strong need for new housing.
We're about 1.5 million units short, says Danushka Naniakara at the National Association of Home Builders. So the demand is there.
The question is the affordable, the entry-level housing.

The lack of that is pushing people out of the housing market.

And that's the issue right now.

And if rates stay elevated and tariffs make building materials more expensive, she says, that issue won't go away.

I'm Henriette for Marketplace. Etsy's had a rough week.
Shares in the artisanal merchandise company were off better than 9% today, no small part because it reported a worse-than-expected fourth quarter, even as consumer spending was growing at the end of last year, as we've told you. And the company said it expects this quarter to be stuck in the doldrums as well, although that is not entirely Etsy's fault, as Marketplace's Kaylee Wells explains.
Etsy got its name from offering stuff like handcrafted candles and custom wedding guest books. But it also started offering cheap, mass-produced stuff.
And that market is crowded with competition. The trick is, is that on T-Move, the price is lower.
Same thing with Amazon. Supply chain consultant Britton Ladd says he thinks Etsy has likely peaked.
And so it's going to be very challenging for Etsy to do something that's so special that it pulls all those other customers away. Etsy's strategy so far is to double down on the artisanal stuff, says Skye Canavis.
She's a retail analyst at eMarketer. That focus is likely to appeal to a smaller audience.
And so we would expect to see their sales continue to contract in line with that. Because this trend of consumers seeking cheaper prices isn't going anywhere.
Economics professor Brett House at Columbia Business School says years of high prices have put more strain on consumers.

Credit card defaults are up, credit balances are up, and people are likely cutting back on some of their discretionary spending. The weird part is the fourth quarter's typically a strong one for consumer spending because of all the holiday shoppers.
But this season was different. They also saw the election results in November and the increased policy uncertainty that came along with that.
There is another way out, though. Consultant Britton Ladd says the best next move for Etsy might be getting acquired by Michaels or eBay.
I'm Kaylee Wells for Marketplace. So let's talk about that last piece of sound in Kaylee's piece there, that line from the guy at Columbia about consumers reacting to the election results.
Turns out, according to a new Harris poll, that since the election, more than 40 percent of consumers, 4-0 percent of consumers, have changed their spending habits to align with their beliefs. A quarter have stopped buying from their favorite brands, and about a third say they have no interest in supporting the economy this year and are looking for ways to opt out.
Marketplace's Samantha Fields has more on that one. More Democrats say they've changed their spending habits recently than Republicans, according to the Harris Poll.
Timothy Werner at UT Austin says that makes sense, given who's in power in Washington right now. During the first Trump administration, there was a campaign called Grab Your Wallet.
To try to get people to not spend money at any companies associated with Trump. And you saw no kind of dynamic that was on the other side being supportive of him.
When people are angry with a company over its politics, he says it's typical for them to stop shopping there at least for a while. Whereas when people support a company's politics, they aren't as likely to shop there more.
Bruce Freed at the Center for Political Accountability says economic boycotts are increasingly common. As our politics have become much more polarized and much sharper, you have consumers now who are taking a look very closely at what companies are involved with.
The idea of opting out of the economy entirely, though, that feels new, at least to John Gerzma at the Harris Poll. Just stepping back for a second and thinking about how important consumerism is to America's GDP, you know, it's 70 cents on the dollar.
So if a third of consumers were to stop spending, even just for a little while, he says that could have a big impact. But Timothy Werner at UT Austin says it probably won't.
Especially as attention spans shorten and news cycles shorten, the effects of these things are really very short-lived. And for businesses, getting involved in politics through donations and lobbying is often worth it.
Companies who spend more on lobbying secure more government contracts.

They pay lower effective tax rates.

They generally benefit from lighter-touch regulation.

And that can affect their bottom line in a way consumer boycotts rarely do.

I'm Samantha Fields for Marketplace. Coming up.

I really don't think that we've used voice in the way that many of us have dreamed about.

Dreaming about actual AI voice assistants.

But first, let's do the numbers.

Downduster is up 71 points today, two-t tenths percent on the blue chips, 44,627. The Nasdaq lifted 14 points, about a tenth percent, 20,056.
The S&P 500 also grew 14 points. That's almost a quarter percent on that index, 61 and 44.
Intel has had a roller coaster. Weak stocks rose on news that competitors TSMC and Broadcom might take it over.
Yet today, Intel dropped six and a tenth percent. TSMC down nine tenths percent.
Broadcom grew about a tenth percent today. Electric and hydrogen truck maker Nikola has fought for Chapter 11 bankruptcy protection.
And as finally, the company said it has liabilities of up to $10 billion. Nikola plunged 39.10%.

That 10% is the important part there.

Tesla grew 1.8%.

Thor Industries down 2.2%.

Telehealth company Hims & Hers Health announced it's acquiring Sigmund,

also known as Tribe Labs, which will allow Hims & Hers to offer home lab testing.

Shares up 17.5% on the day.

Bonds up.

Yield on the 10-year T-note down 4.53%.

You're listening to Marketplace.

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This is Marketplace. I'm Kai Rizdal.
It is, as we have learned by now, folly to predict what might or might not happen with tariff policy in this second Trump administration. But if all goes according to the president's promises, in less than a month, there are going to be new 25 percent tariffs on all steel and aluminum that enters this country.
Herewith, by the way, the obligatory reminder that tariffs are paid by the importer and by extension and ultimately by the consumer.

That said, there is some research from S&P Global Ratings that shows the impact of higher tariffs will be uneven.

Some businesses are going to pass costs along. Others might not.

And as Marketplace's Justin Ho reports, what side of that line a business falls on depends on who its customers are. Mavericks Manufacturing Partners in Escondido, California, makes metal components for the energy and defense sectors.
That's the sound of an employee at the company last April welding a piece of steel, one of the metals said to get hit with higher tariffs next month. Meanwhile, the price of the other metal, aluminum, is already rising, says Chris Blench, the company's CEO.
The tariffs don't even have to be in effect. It's just the threat of them, and that's creating a tremendous amount of uncertainty.
As a result, Blench says he's going to have to ensure that the prices he's charging his clients account for that uncertainty. So now when he writes up a bid for a project? We'll just have that one little asterisk on the material component that says, you know, depending on the pricing of that particular material at the time of award, we're going to pass on whatever our cost is.
Blench says he can do that because his customers, largely the defense and energy departments, are so big that they're not going to sweat the increase. And besides, his competitors do the same thing.
We're trying to compete on our efficiency and other credentials of our businesses. But when it comes to the raw material, the price goes up 25%.
All of the other competitors are going to be passing that along. Not every business has the leverage to do that.
Satyam Pandey is chief U.S. and Canada economist at S&P Global Ratings.
He says if your customers are small businesses, for example. You would probably want to think twice before doing that.
In your renegotiations of the contract, you probably have to share the cost.

There's also a third kind of business where passing along the cost of tariffs

might not make sense at all.

You know, beer has always been this affordable luxury. It should be very accessible.

That's J.C. Hill, the owner of Alvarado Street Brewery,

which operates a few locations in the Monterey Bay area in California.

And because he sees beer as an affordable luxury, he doesn't want to pass along any cost increases to his customers, especially after all of the inflation in recent years. And in the past, we have been able to raise prices to not take that hit directly.
You know, before inflation, I think now people are less likely to want to pay more. Hill says he's expecting the price of aluminum cans to rise, along with the price of stainless steel fermenters, kegs, and other equipment.
He says he's keeping an eye out for used equipment. He doesn't want to have to do anything drastic, like lay off employees.
You know, it might just be one of those things where we just have to wear it on the chin and hopefully, you know, ride it out. In the meantime, Hill says his goal is to keep growing the brewery's capacity

a little bit every year so he can cover his costs by selling more beer.

I'm Justin Ho for Marketplace. technology moves quickly we see that every day this or that new gadget or software doing amazing new things.
Unless you're talking about what are by now the old reliable Siri and Alexa. Upgrades were supposed to be coming for both this spring, but have been pushed back, which sets them back as they play catch up to ChatGPT and all the new tech kids on the block.
Marketplace's Megan McCarty Carino looks at how voice assistants fell behind and where they might be going.

When Apple unveiled Siri at an event back in 2011, the tech seemed revolutionary.

I am a humble personal assistant.

Scott Forstall, Apple's senior VP of iOS software, gave the demo.

Let's say you need to set an alarm clock.

Just ask Siri. Wake me up tomorrow at 6 a.m.
Okay, I set it for 6 a.m. 13 years later, and Sean Salisbury, a software entrepreneur in Oceanside, California, says that's about all he uses Siri for.
Just simple reminders on my phone. Just, you know, remind me to do this or remind me to do that.
Siri has gotten updates over the years. You can now set two timers at once.
But Salisbury says it still struggles with basic requests. Like I'll get an email and I'll tell it like, hey, read me this email, the one that I have open, you know, read me this email.
And it just reads me the last, the titles of the last five emails I've gotten. It just says, Start with your priority mail.
From Facebook, security alert. Log in your Vista.
I don't need to know my Facebook security alert. Alexa from Amazon, a marketplace underwriter, can also set timers well.
But Grant Berry uses his eight Echo devices to control home electronics, like his lights or alarm system. I'm able to say what to do exactly using very precise language.
Berry is a professor of language science at Villanova University, who also worked on Alexa technology for Amazon. He says improvements in natural language processing, the way computers understand human language, have helped voice assistants like Alexa become more conversational over time.
But they're still more rigid than modern AI chatbots. Alexa can tell you jokes, but they're all really bad dad jokes.
Ask her what her favorite color is. I like ultraviolet.
It glows with everything. That's her answer every time.
And you know someone hard-coded that in. Yeah, had to have.
Most people don't need stand-up from their voice assistants, but Barry says using more sophisticated AI language models, like those powering chat GPT, will make it easier to communicate with devices the way we do with people. It is natural for us to omit information or reference back to things that have been previously stated.
You might ask, hey Siri, who is the president of France? Emmanuel Macron is the president of the French Republic. Then just use a pronoun.
How long has he been president? It started May 14th, 2017. Okay, how many years is that? It started May 14th, 2017.
Still needs some work. ChatGPT tells me it's been seven years and nine months.
OpenAI's chatbot can carry on spoken conversations, as can Google Gemini, but today's top AI systems are typically thought of as typing-based, says Larry Heck, an engineering professor at Georgia Tech who has worked on voice assistants for Microsoft, Google, and Samsung. I really don't think that we've used voice in the way that many of us have dreamed about.
He wants an AI conversation partner. He could ask for help, say brainstorming his trip to Italy.
The AI says, oh, you know, you're interested in staying at a medieval castle in Tuscany. Oh, you know what? I found a few places.
These are kind of cool. What do you think about these? Currently, he says even the most advanced AI systems can only engage in so much back and forth.
They find an answer or confidently make one up instead of asking follow-up questions. That's not great if you want a voice assistant you can trust to make purchases or appointments, potentially at a monthly fee.
Even if voice assistants do improve, users like software entrepreneur Sean Salisbury might not bother. Right now it's hard for me to think of what I would do because I've been frustrated with it.

Hey Siri, remind me to try you out again once you get updated.

I'm Megan McCarty Carino for Marketplace. This final note on the way out today in which I read you a sentence from the minutes of the most recent meeting of the Interest Rate Setting Federal Open Market Committee, the one back in January, and then translate that sentence into regular person English.
Here you go. Quote, the current high degree of uncertainty made it appropriate for the committee to take a careful approach in considering additional adjustments to the stance of monetary policy.
You know, actually, that's pretty clear already, isn't it? Uncertainty, careful approach, it's all right there. For the picking.

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