What do U.S. Treasury auctions have to do with me?
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Bonds, inflation, and video games. What more could you possibly want? From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Tuesday, today the 10th of June. Good as always to have you along, everybody.

We are going to have to borrow, we, the United States of America, is going to have to borrow another $2.4 trillion on top of the $36 or so trillion we already owe if the GOP's big tax cut bill that Congress is debating gets passed as is. That, in the vernacular, is a boatload of borrowing.

The way the government does that, of course, is by selling bonds. And on Thursday, the Treasury Department is going to hold a regular bond auction looking to sell about $22 billion worth. Notably, though, looking to sell long bonds, 30-year bonds. Of particular interest, no pun intended, is what yield, what interest rate buyers of those longest maturity of all U.S. bonds are going to demand.

Because as Marketplace's Sabri Beneshour reports to get us going, how that auction goes is going to tell us something about how expensive borrowing is going to be for the government, but also for us. So come Thursday, the U.S. government is going to sell some bonds that last 30 years. And this is a test. Mark Cabana is head of U.S. rate strategy at Bank of America Global Research. The auction is a test of investor interest.

to see how well that ultimate demand is looking. 30 years, a bond that lasts 30 years, that is an awfully long time to lend anybody money, even the U.S. government, because a lot can change in 30 years. And over the past eight months or so, investors have started to worry a little more about that. John Canavan is lead analyst at Oxford Economics.

The auction this time around is a little bit more important because there just have been increasing concerns about the sustainability of U.S. deficits and whether or not the demand that we have seen historically will be there. Deficits matter to long-term bond investors because they affect interest rates, and interest rates affect how much money investors are going to make. Gennady Goldberg is head of U.S. rate strategy at TD Cowen. If it seems that the U.S. fiscal trajectory is deteriorating, that just means we're

The U.S. is likely to issue more and more debt in the coming years. Investors want to be paid higher and higher interest rates to hold that debt. The bigger the deficits in the future, the harder the government may have to work to borrow money to cover them. The higher interest it may have to pay in the future.

But if you're buying a 30-year bond, well, 30 years, that is the future. Long-term bond investors will want higher rates now to cover that future. They already have. They've started demanding almost a full percent higher interest rate. The question is how much more will they want and how soon? Markets are looking for any signs of weakness.

They'll look at how much demand there is at this coming auction and where that demand is coming from, and they'll look at what interest rate the market settles on for these bonds. Recently, all of this looks stable, says Bank of America researchers Cabana. Sentiment is not as sour as it has been in relation to recent months.

Which is good because whatever interest rates the government ends up having to pay, that sets the rates we all pay for auto loans, mortgages, business loans out in the rest of the economy. In New York, I'm Sabri Beneshour for Marketplace. Just so's you have it, should it come up in conversation or something. The yield on the 30-year today, 4.93%. Elsewise, on Wall Street, equities were up. We'll have the details when we do the numbers.

This probably isn't an item on most people's calendars, but around these parts, this is inflation week.

We'll get the May producer price index on Thursday. That's a measure of inflation at the wholesale level. Tomorrow, the Bureau of Labor Statistics is going to share with us the May consumer price index. That's inflation for you and me. And when that CPI comes out, much attention is paid to the top line number. We do that too, mea culpa. But down in the CPI fine print, there is a line item that reads commodities, less food and energy commodities.

That's what's called core goods inflation, the change in the price of goods except for food and gas and electricity and the rest of the energy industry where prices tend to be more volatile. All of which I mentioned as marketplaces Stephanie Hughes is about to explain, because that's one of the first line items where tariffs might show up.

Economist Leah Brooks teaches at George Washington University. She's also a parent, and her third grader just had an end-of-the-school-year party. And every parent bought some, like, small toy plastic item. Her daughter came home with stickers, a little paddleboard and ball, one of those pens with lots of colors of ink. Those are all core goods, and Brooks says a lot of them were likely imported, which means tariffs could now be affecting their prices.

Maybe. And it seems like firms are still negotiating with their suppliers and the tariffs themselves have been changing, appearing, disappearing. Core goods inflation has been mostly flat over the past couple of months, down a tenth of a percent in March, up a tenth in April. But Morgan Stanley economist Michael Gapin thinks for the May reading, it'll be up three tenths percent. We're entering the window, if you will, where goods prices are likely to move higher as firms pass along inflation.

the fact that they've had to pay tariffs to bring those products into the country. Gaben says figuring out how much of a price increase to pass along to customers is a matter of trial and error. Businesses will tend to absorb some, which weakens profitability, but they'll pass along as much as they can to the final consumer, which means inflation goes up. When

When core goods prices do go up, people notice. Alan Detmeister is an economist at UBS. You walk into the retailer and you see, oh, you know, they're not having as many sales or they've increased their price on this. And that can make consumers grumpy. Again, George Washington's Leah Brooks. I think the parents in my daughter's class like to be able to buy cheap pens on Amazon.

And if those pens get more expensive? It means that parents have to reallocate something in their budget, right? They have to give up something else to buy the cheap pens or they have to buy fewer cheap pens. In other words, spend more on less stuff. I'm Stephanie Hughes for Marketplace.

We've been in Utah County the past week or so to see what an economy full of young people looks like. It's like a small city emptying out every day, man. But there's plenty of space. Odds are that at some point you've experienced the chaos that is high school pickup time. But this school that ADP chief economist Neela Richardson and I visited, Cedar Valley High in Eagle Mountain, Utah...

has 3,400 students. And you can see that with cars lined up for blocks and, to be honest, some students speeding through the parking lot themselves. We found ourselves near a newish football field with corporate logos on the sides of the stands from companies like Tyson Foods and Meta. Kids were getting ready for softball practice on a hot and sunny Thursday afternoon as we stopped in front of a campus business. Cedar Valley Jet Fuel Soda Shacks. Support your CV students. You know how Utahns love their dirty sodas?

Some kind of soda mixed with flavored syrup and fruit and sometimes like half and a half. Well, at Cedar Valley High, the students run a soda shop of their own. It's called Jet Fuel. It opens up after school in a little brick building right near that football field. So this is your after school job? Yeah, basically. Yeah.

What is this place? So Jet Fuel Soda Shack is kind of like a way, it's an actual business, and it's a way that us students can kind of get some work experience while also paying off our student fees while other clubs or extracurriculars that we're in.

That's Josefa. She's 17. She and Rachel, 16. We're opening Jet Fuel for the afternoon when we visited. It's got the whole deal. Industrial refrigerators, soda dispensers, of course, and a huge stainless steel table covered with dozens of flavored syrups, everything from cheesecake to passion fruit. How many hours a week do you work? Oh, for me, it kind of varies per week. Usually I try to get like two or three shifts in a week, but right now it's like finals week, so I've been taking on less. Just trying to focus on school. Amen. Great to know. Yeah.

And the money you earn isn't money money, right? No. It gets deducted from your school fees? How does that work? So we have our student credit kind of thing. So I do wrestling, and it was like $500 for that. So this just goes directly to my student account as credits I have earned. So I'll just take that off right away for the next year. So wrestling now for you doesn't cost you anything? No. I'll just get work experience and get to make some fun drinks. Nice. What's your favorite drink?

Oh, my favorite drink, I like to make my own. My favorite drink is Sprite, pineapple, coconut, and coconut cream. It's like a pina colada. It's so good. I also like the Flyboy. If I had to pick one off of our menu, I'd choose the Flyboy. Sorry, I'm going to go read the menu here. Yes, you have a minute. Let me slide by. Yeah.

The sodas come in all sizes, up to 44 ounces for $2.25. Jet fuel is kind of like a school-wide project. Students came up with a menu full of flight-themed names. The school's mascot is the aviators. The business class made the plan for jet fuel. Another home ec kind of class bakes the cookies that they sell.

Have either of you ever thought about running and starting your own business? Yes. I'm actually like really into business. I do like all these entrepreneurship clubs, beginnings, and do like all this crazy stuff about business. So I feel like this is kind of a fun little way of seeing like all the actual numbers from behind the scenes. So what are you going to do? What's your big idea? Dude, honestly. I promise I won't steal it. I don't know. I don't have like a big idea yet, but I just know like I want to run something. I want to operate something big. I'm more like, let me manage it. You come up with the idea kind of thing. So if you got something, let me know.

You can take credit too. I just want to run something. There's some public radio entrepreneurship thing to do, I'm sure. Yeah, for sure. What's your sense? You guys are business minded, right? What's your sense of the economy out there? Are you paying attention to what's going on?

I mean, I hear what my parents say and like I do research for myself as well. I try to be open minded when it comes to looking at the economy and then I see how jet fuel changes with the economy and I try to ask questions about it too. Say more about jet fuel changing with the economy. Oh, I'm

I feel like, first of all, inflation right now, right? I think it used to be a thing that we used to fill up our water bottles with free drinks or whatever here, and they're just like the small things. But now, just due to the different price range and stuff, we kind of can't do that anymore. We just have to be more kind of set on our budgets and what we can and can't give out. We left the girls to take their soda orders, and we moved to the other side of the business to meet the big boss, Courtney Johnson.

I'm the principal of Cedar Valley High School. We opened in 2019, and that was my role, to open up the school. You're the founding principal? Yes. The school is huge. Feels almost like a college. When it opened, it had 1,800 students. How do you open a school with just 1,800 kids? Because that's a very large high school by most community standards. That's true. If I would have known we'd be at 3,400 by year six, I wouldn't believe you.

I'm going to say that again. This school has been open since 2019, and since then, enrollment has nearly doubled to 3,400 high schoolers.

You mentioned that you're surprised by the rapid growth. Oh, absolutely. Just ballpark. How long do you think it'll take before another high school is built in this community? We're thinking two years. Two years. And will that open with more than a thousand students? Oh, absolutely. We're busting the seams. I mean, Utah, we love babies.

Eagle Mountain is one of the youngest cities in Utah County, in no small part because there are so many kids. The median age for the whole city is 22. And Eagle Mountain's still growing, and the negatives are starting to show up.

I wish I would have bought 20 homes when we opened because I'd be worth millions of dollars just in property gain values out here. It's gotten very expensive. But there's only so much land that you can build on, and this is where the land is. So it almost became like a land grab for the district to even buy property for the schools and for future schools. I mean, I'm surprised how much they're getting for homes out here. But they're big.

It's not just homebuyers making investments in town.

Well, what also I see in Utah, or at least in this high school, is some corporate names on your stadiums. Tyson's, Meta. Can you tell us how those names appeared on this football stadium? They're our best friends. They're our best friends. Tyson Foods has a beef and pork plant in Eagle Mountain. Meta has a data center, which is why Courtney is pitching them. I just received another 80,000 just a week ago from Meta because we pitched these crazy ideas, and if it involves STEM...

So science, technology, math, those kinds of things, they will support us. You know, there are people who are going to hear this and they're going to go, why is a high school in cahoots with all these big companies? You just have to understand their mission and show that...

Sometimes that's true and it has to be. Well, all the time. Well, their mission too. It depends on how you can align your mission with their mission. And it's not always about profitability. I know the bottom line. My dad was a businessman, so I get that. You want to make your money. And I got to run a business here. I have to keep my bottom line. But if you were to ask me what I'm about, I'm not going to tell you. It's about keeping a balance balance.

worksheet. I'm going to tell you it's about educating kids and providing opportunity. And so same with them. They want to develop their future workforce. They want kids with job-ready skills. So that's how I tie it into their mission. A lot of the business owners we met in Utah talked a lot about how business-friendly this state is. And even at high school, you can feel that culture from the girls working at the school-run soda shop to the major corporate sponsors with banners on the side of the football stadium.

They're betting that this place and all the young people in it is the future of their labor force. We are going to wrap things up from Utah tomorrow with a look at how places like Eagle Mountain get built. And then we'll get Nila back on the phone to talk about what we learned while we were there. Coming up. To survive, we really need to look abroad. American higher education is a high value export. But first, let's do the numbers. Music.

Dow Industrials up 105 points today, about a quarter percent, 42,866. The Nasdaq picked up 123 points, that's six-tenths percent, 19,714. The S&P 500 gained 32 points, a little bit more than a half percent, 6,038. Designer Brands owns a whole bunch of brands in the footwear sector, Keds, Hush Puppies, DSW among them. Today it joined the growing list of companies that have yanked their financial forecast for the year because of...

Anybody? Anybody? Tariffs and uncertainty. Designer brands stepped down 18 and a quarter percent. I missed a Bueller joke in there, didn't I? J.W. Smucker cited, oh, wait, what? Yes, tariffs and uncertainty and cutting its forecast for the year to well below what analysts expected. The maker of Uncrustables down 15 and six tenths percent. The 10-year T-note today, 4.47 percent. You're listening to Marketplace. What makes Hawaiian Bros so different? We

We have no freezers, no fryers, and no microwaves. Because when you skip all that, you're left with one thing. Fresh. Right now, we're grilling, saucing, and tossing fresh ingredients into our mouth-watering new wraps. Choose teriyaki-glazed huli huli chicken, the kickin' sweet heat of our Molokai Mac, or the citrusy, irresistible Pacific Island wrap. Grab one today for just $7.99. Only at Hawaiian Bros.

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This Father's Day at Lowe's. Score free gifts for the greatest dad. Right now, get a free Blackstone 8-piece accessory kit when you buy a Blackstone 28-inch griddle. Plus, get two free Select Craftsman V20 tools when you buy an RP brushless drill and impact driver combo kit. Shop these deals and more this Father's Day at Lowe's. We help, you save. Valid through 615. While supplies last, selection varies by location.

This is Marketplace. I'm Kai Risdahl. Video game retailer GameStop reported earnings today they did worse than expected. Revenue's off almost 20%. Though, it does have to be said that video game retailer doesn't really do that company justice anymore. Over the past five years, GameStop has launched a now defunct NFT marketplace. Remember those weird crypto token things for everything from art to sports trading cards to real estate?

GameStop also became an authorized dealer of sports and hobby trading cards. And just last month, it bought about $500 million worth of Bitcoin. The impetus for those, shall we say, interesting new lines of business was that old Reddit-driven meme stock craze from early in 2021, if you remember that. And that craze, as Marketplace's Matt Levin reports, is still alive and kicking.

A couple of years ago, Wedbush Securities' Michael Pachter sat down at a blackjack table at the Bellagio in Las Vegas. He said the card dealer told him that she was 65 at the time. And when he said what he did for a living, analyze the stock prices of companies like GameStop. She actually told me she took out a line of credit on her house of $100,000 to buy GameStop because her kid told her to.

Pachter says about 90% of GameStop's stock is still owned by retail investors, non-professionals who still plumb the depths of Reddit threads for financial advice.

Meanwhile, the company's stock price has dropped more than 60 percent from its 2021 peak. But even so, Pachter says GameStop wouldn't have survived this long without investors like that blackjack dealer. Video game players just buy online now. GameStop has been declining in sales by double digit percentages every year for about the last seven years.

The big reason the GameStop story really took off was it had a clear villain, hedge funds trying to short the stock. But Dan Egan at the online investment manager Betterment says he's not surprised the meme stock Reddit threads are still pretty active years later. I do think that social media is here to stay, and that is a structural change to how retail investors are going to interact with financial markets.

He thinks we'll likely see more meme stock frenzies in the not-too-distant future when a new generation of investors enters the market. They're going to have their own meme stocks, and we'll talk about the cross-generational meme stocks. Although, I remember when I was a kid, it was GameStop. And for you, I don't know, it's, you know, some AI-related companies. Unclear whether the actual brick-and-mortar GameStop stores will still be around by then, I'm Matt Levin for Marketplace.

President Trump's targeting of higher education in this economy has so far focused on the Harvard's and the Columbia's, the highly selective universities, highly selective private universities, I should say. Immigration crackdowns and student visa restrictions have left foreign born students uncertain at best over what might happen to them. Public universities, too, though, depend on international students and their tuition dollars, as Marketplace's Savannah Peters reports.

The student body at Arizona State University is about 15% international. That's over 17,000 students. Well, it makes us a better university because our other 70,000 students that are from the United States compete against the best talent from the entire planet. That's ASU president Michael Crow. To see a kid that grew up in the Philippines talking to a kid who grew up in Window Rock

It just is tremendous. It's a tremendous tool for the advancement of the democracy that we have inherited. And a tool for keeping college affordable for that kid from Window Rock or Phoenix or Yuma. Crowe says international students pay a premium to attend ASU, about $37,000 a year in tuition alone.

more than double in state tuition. Our margin for international students helps us to pay for the American students that we give substantial financial aid to. The Trump administration's restrictions on international students have put some very elite private institutions in the spotlight. But Crowe says those moves could cause financial troubles at big public universities like his. Oh, we're deeply affected by this.

I actually think of those kinds of schools as being more reliant on international students. Gaurav Khanna is an economist at UC San Diego. He says that reliance dates back to the 2008 recession, when lots of public universities saw their budgets slashed by state legislatures at the same time domestic students were struggling to afford college. That's when these universities said, OK, to survive, we really need to look abroad. Khanna

Kana says schools like the University of Illinois, Texas A&M, Ohio State depend on this strategy of subsidizing cheap in-state tuition by admitting more international students who pay full tuition or even a little extra.

Kana says the story at Ivy League and other elite private schools is different. The reason Harvard cares a lot about the international student body is that they're basically attracting the top talent. He says those schools will actually foot the bill for the most talented foreign-born students, who it believes will help bolster its prestige.

Cano says a slowdown in international enrollment will hurt those schools' exclusivity more than their bottom line. They can tap into long waitlists of domestic applicants.

But, says William Brewstein, a global strategist in higher ed, Those land-grant schools, those state public universities, the regional ones, universities that do not have the cachet will have a much more difficult time making up for that revenue loss. Brewstein has worked on international recruitment strategy for a couple of big public schools, most recently West Virginia University.

He says those institutions operate on thin margins. Fewer international tuition dollars could mean faculty layoffs, cuts to course offerings and degree programs, even closures of rural satellite campuses. Hitting the quality of the academic education, it's not a pretty picture that we're looking towards in the future. Brustein says elite schools will weather the president's crackdown on foreign-born students.

but it could put a quality public education farther out of reach for the average American. I'm Savannah Peters for Marketplace. This final note on the way out today in which the good news is that the World Bank says there is not going to be a worldwide recession because of President Trump's taxes on imports.

Instead, we're just set to have our weakest decade of global economic growth since the 1960s because of President Trump's tariffs. That was in the bank's most recent forecast out today. Globally, the World Bank says the economy is going to grow at an annual rate of 2.3 percent this year. The United States, just 1.4 percent. That is down from 2.8 percent for the year 2024.

Our digital and on-demand team includes Jordan Mangy, Dylan Mietenen, Jenna Nguyen, Olga Oxman, Virginia K. Smith, and Tony Wagner. Francesca Levy is the executive director of digital and on-demand. And I'm Kai Risdahl. We will see you tomorrow, everybody. This is APM.

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