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In Baltimore, I'm Amy Scott, in for Kai Risdahl. It is Friday, the 9th of May. Good to have you with us.
The first shipping containers full of Chinese goods subject to that new 145% tariff have begun arriving in U.S. ports, just as trade officials from the two countries are preparing to meet in Switzerland tomorrow. And after the Trump administration announced a framework for a deal with the U.K. yesterday. Joining me to talk about the state of trade negotiations today.
And the rest of the economic week that was our Courtney Brown, economics reporter at Axios and Sudeep Reddy, senior managing editor at Politico. Hey, you two.
So before we get to global trade, Sudeep, let's start here at home. This week, the Fed said it would leave short term interest rates alone, despite some signs of a weakening economy or rising risks of a weakening economy. Sudeep, how do you read the messaging that came out of this week's meeting?
So Jay Powell, in his press conference, used variations of wait and see a couple dozen times. And that's basically what they're trying to do is wait and see what the impact is of the tariffs, wait and see what the damage to the economy ends up being. The uncertainty at the Fed is probably devastating.
not at has not been at this high level since the pandemic or in variations of the pandemic and the financial crisis and other recessions. This one is in particular a concern for them because uncertainty across the economy is so high in all of the survey data. It shows that uncertainty in just the last month has spiked to incredible levels because businesses don't know whether supply chains are going to be snarled. Consumers don't know whether they need to buy
uh baby strollers or whatever else they need to get uh uh before they start going up uh in price and so uh the fed doesn't know what's what the impact of all that's going to be and that's a very very difficult situation to be in when you're trying to steer the world's biggest economy
Absolutely. Yeah, I counted, I think, six times Powell used that word, uncertainty in the presser. Courtney, at that press conference, you asked a really interesting question about the difference in what we're seeing in the so-called soft versus hard economic data. First of all, can you explain what you mean by that and also what you made of Powell's answer? Sure.
I don't know why we do it this way, but we call survey data soft data and we call, you know, things like the payrolls release, the GDP report, the consumer price index. Those are the hard data sets. So we know that the hard data, if you will, has shown an economy that's pretty resilient in the face of, you know, tit for tat tariffs and, you know,
escalating trade tensions over the past few months. But that hasn't been the case in the soft data. The soft data has been pretty gnarly. Consumers are worried about the job market. They're worried about inflation. Their inflation expectations are soaring. Manufacturers are reporting spike in input costs and a slowdown in demand. And so the Fed is weighing these two different
data sets. And what I asked was, why is it that the Fed is having to wait for
for what we're seeing in the soft data to translate into the hard data. And I'm going to be honest, Amy, I didn't really get an answer. But one thing that Paul did say is that... One thing he did say was that there has been this disconnect between the soft data and the hard data. Remember that whole vibe session era we were in? Oh, yeah. The soft data was really crappy, but the hard data showed an economy that was resilient. You know, Paul said...
That's probably not the case here, but it seems like they're waiting to see how the economy is doing and they're not looking to these more survey-based indicators to make their judgment.
Yeah. And Powell said, maybe not directly answering your question, but he feels they can afford to be patient right now. But Sudeep, President Trump obviously disagrees. He has stepped up his attacks again on the Fed chair, calling Jay Powell too late, Powell. You know, politics aside, obviously, the Fed maintains its independence for a reason. But is there a risk here of cutting too late?
Well, first of all, he's got to come up with a much better nickname than that if he wants to pull anything off here. The Fed obviously has a risk of cutting too late. The idea of preemptive rate cuts is something that Chair Powell is obviously on his mind, but preemptive for what purpose? When the job market is still holding up, you're not like –
really accomplishing much. And the Fed, after all of the bruising battles they faced with inflation over the last few years, they really can't get in a situation where they're on the wrong side of this. The Fed is often the policymaker of last resort, and their entire credibility rests on getting the inflation story right this time around, since they were a little late the first time back in 21 and 22. And so they
The chairman recognizes that this is this is his credibility and his place in the history of books is on the line here. OK, well, let's talk about those tariffs that are the reason for all of this uncertainty. Yesterday, Courtney, there was an outline of a deal with the UK. What do you make of that? How significant is it?
I keep putting deal in scare quotes. It's in scare quotes on my page right here as well. Okay. I'm glad we're on the same page with that then. President Trump certainly touted it as a deal, but the UK very much sees this as the end of the beginning, as one British official involved in the talks put it to me, not the
Not the final deal here. What's interesting to me is that right now we still have that 10% universal baseline tariff in effect for any UK goods coming into the US.
That speaks to me that there might be a little bit of a new normal emerging here where the UK seemed relatively satisfied with some of the concessions they got. The Oval Office was touting some of the market access that they got.
But it seems weird to me that the 10 percent tariff is still here. And I wonder if this is going to be the new normal and how that translates into some of the other deals that we're going to see the administration make with other countries, including China. Right. And we'll have to pick up the China story next week after this meeting happening this weekend. Courtney Brown, economics reporter at Axios, Sudeep Reddy at Politico. Thank you both so much and have a great weekend.
Thanks, Amy. On Wall Street today, relatively stable. We'll have the details when we do the numbers.
One of the perks of homeownership is supposed to be stable housing costs. There are no surprise rent increases when you have a 30-year fixed rate mortgage. But lately, rising home insurance costs and in some places skyrocketing property taxes have made that monthly payment less fixed.
A recent analysis from LendingTree found that between 2021 and 2023, the most recent year's data were available, property taxes in the U.S. rose by an average of more than 10 percent. More than half of homeowners now with a mortgage are paying more than $3,000 a year. Marketplace's Kimberly Adams has more.
According to LendingTree, property taxes are up in all 50 of the largest metro areas in the country. Matt Schultz is the company's chief consumer finance analyst. Something like property taxes can make a house that looks like a bargain...
a little bit less so. The increases are mostly driven by the assessed value of properties going up, says Lucy Dedean at the Urban Brookings Tax Policy Center. And it's not surprising to see places seeing the highest tax increases as also the places that have seen high property value increases.
Places like Florida and Texas, for example, where tough competition for homes has pushed up prices and thus the taxes on the properties.
And while many states and many cities have rolled back their property tax rates to account for this, most haven't done it enough. Jared Walzak is vice president of state projects at the Tax Foundation. When rates stay the same, but the values of homes and the taxes on them go up, it means more revenues flowing into local governments, which they can spend on things like roads and schools.
But Walzak says it's effectively a tax hike people didn't vote for. And legitimately, you have a lot of property owners asking why this is on autopilot and why they're not seeing relief. Walzak says the last time we saw property taxes jump like this, back in the 70s, voters revolted all over the country and passed a wave of laws to keep the increases in check. In Washington, I'm Kimberly Adams for Marketplace. ♪
Last year, this country endured 27 weather and climate related disasters that each caused at least a billion dollars in damage. We know that because it's something NOAA, the National Oceanic and Atmospheric Administration, has been tracking adjusted for inflation going back to 1980.
Until now. Yesterday, the agency announced it will no longer update the data set due to, quote, evolving priorities, statutory mandates and staffing changes.
And as Marketplace's Stephanie Hughes reports, it's going to be missed. Some parts of the billion-dollar disaster tool are pretty colorful. It's got a map of the U.S. with different icons, a thundercloud for severe weather, a kind of purple funnel for a tornado. Just the graphic alone is an easy way to show what types of events are hitting our country. Julie Roberts worked as deputy chief of staff for NOAA during the first Trump administration. She's now a disaster management consultant.
She says the database is an easy way for the public to grasp the total cost of these disasters. And that its discontinuation is part of a larger movement by the Trump administration around climate change.
I mean, we're seeing science overall being removed or downgraded. The database is also used by the insurance industry as a way for them to estimate future costs of big weather. And you as a customer want us to be able to do that. Liz Henderson is head of global climate risk advisory at Aon, an insurance brokerage.
Because if we can't do that, then we're not going to be around to pay the claims when the event happens. Henderson calls the NOAA database a single source of truth. And she says without it, the insurance industry will rely on private sources of information. That'll create a split in terms of how insurers view risk. We're not going to have as good transparency in how the industry is pricing and underwriting for these risks.
Another person who's going to miss the database? Kyle Spencer. He's chief resilience officer for the city of Norfolk, Virginia. Our region hasn't had that billion-dollar disaster. Spencer says he looked to the database for lessons learned. And to make the case for spending money on things, the city should put in place to prevent a big disaster. The model is you want to avoid that before it happens. And it's harder to know what might happen in the future if you aren't keeping track of what's happening right now.
I'm Stephanie Hughes for Marketplace.
The Dow Jones Industrial Average slipped 119 points, 0.3% to close at 41,249. The Nasdaq gained less than a point, staying basically flat to finish at 17,928. And the S&P 500 slid four points, just a tenth of a percent, to end at 56,59%.
For the week, the Dow decreased 0.2%. The Nasdaq subtracted 0.3%. The S&P 500 lost 0.5%. Let's check in on the banking sector on this Friday, shall we? JPMorgan Chase was down 0.2%. U.S. Bancorp subtracted 0.3%. Citigroup sank 0.25%. Bank of America lifted 0.5%. Bonds fell. The yield on the 10-year T-note rose to 4.38%. You're listening to Marketplace.
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This is Marketplace. I'm Amy Scott.
From a high rise in Manhattan's financial district, I recently took in the view of the New York Harbor with Brad Lander.
controller of New York City. He's also running for mayor. We are in Seven World Trade Center, overlooking Brooklyn and Queens and Long Island and Lower Manhattan. It's a gorgeous view this morning. But we're not here for the scenery. I came to see Lander because as the city's chief financial officer, he's leading a plan to decarbonize its $285 billion public pension system. That
That's money belonging to hundreds of thousands of New Yorkers living in the boroughs surrounding us. You can see what a harbor city it is. You know, it's hard not to come up here and think about what Superstorm Sandy is.
did and how long we have to go to be ready. In 2012, New York City was caught by surprise when Sandy walloped the East Coast. It caused massive flooding in the city and an estimated $19 billion in damage. 52 people died. In the aftermath, Lander says the city took a hard look at its investments.
If we don't collectively achieve decarbonization goals, it's not only going to cost lives like it did in Superstorm Sandy, it's going to cost trillions of dollars. And we'll feel the impact of that in our funds.
There's the physical risk to investments, say real estate holdings damaged by extreme weather, but also so-called transition risk from the shift to a low-carbon economy.
You don't want a portfolio full of fossil fuel stocks when everyone's driving an EV. So we've adopted one of the most ambitious net zero implementation plans, one of the boldest climate transition investing strategies of any U.S. public pension fund. That strategy involves divesting from some fossil fuel companies and pressuring other companies like utilities to reduce emissions.
Not everyone is happy with that approach. A few years ago, some public employees filed a lawsuit accusing the city's pension plans of a breach of fiduciary duty. But the judge dismissed the case because their pensions are being paid, our returns are good, and the judge concluded that they lack standing. In fact, Lander says last year returns were 10 percent, in line with or better than other big public pension systems.
The city is also investing its pension funds in climate solutions. We increased our clean energy and climate transition investments now to over $11 billion in some amazing companies.
One of those companies is Nine Dot Energy. Yeah, we made it. Our little corner of the Northeast Bronx. Pretty cool. I've never been up here. In a fenced-in gravel lot between an elementary school and a big shopping center, I meet up with co-founder Adam Cohen. With his navy hoodie, he looks the part of a young entrepreneur. You can walk this way. We walk down a row of big metal cabinets. So these are batteries. These are big batteries.
Batteries that could collectively power about 3,000 New York City households for four hours on a hot summer day.
The batteries sit here all charged up with energy from the power lines overhead. And then hold that power until the utility says, please give it back. When the grid gets stressed, maybe everyone's running their AC, the batteries can help meet the extra demand. So last summer, it was called half a dozen times on the peak of the peak days. Enough to reduce greenhouse gas emissions by a combined 24 metric tons.
That's the equivalent of 9,000 car trips on the Cross Bronx Expressway. Nine Dot hopes more of these battery storage farms can be built all over the city, reducing the reliance on dirty power plants. Currently, the city has the dirtiest energy grid in the state. More than 90% of its power comes from fossil fuels.
Battery farms like this could eventually help the grid transition to renewable sources like wind and solar. The sun only shines when nature tells it to. The wind only blows when nature tells it to. But people use electricity when they decide to. And so a battery helps mediate that process. It pulls in the extra power when it's available and then would put it back out when people call for it.
Nine Dot wouldn't say if it's profitable yet, but Bradlander and the city of New York hope the investment pays off not just for retirees drawing pensions, but for future generations, like the kids at the school across the street from the battery farm. I'm definitely an artist. One thing about me, I'm definitely an artist. Virtue Anoja is a sixth grader who attended the Bronx Charter School for Better Learning II.
Two years ago, she and other students helped paint a mural along the fence at the Nine Dot site. I drew a clear blue sky, no pollution, no nothing. Beautiful flowers, beautiful yellow flowers and the sun. There are also drawings of windmills and electric school buses. It's a hopeful imagining of the future that the city is trying to invest into reality.
The latest season of our podcast, How We Survive, looks at the role of investors, large and small, in addressing climate change. Listen on your favorite podcast platform. ♪
Camping season is upon us, or hiking or kayaking or whatever you get up to outdoors when the weather gets warmer. But if you're in need of new gear for those activities, prepare to pay more. A lot of outdoor clothing and equipment is made overseas. And as the Mountain West News Bureau's Rachel Cohen reports, businesses are feeling that trade war.
In Boulder, Colorado, with the foothills in the distance, lies a warehouse filled with rows and rows of shoes.
Rock climbing shoes, mountaineering boots, trail running shoes, hiking boots, and approach shoes. This is storage for La Sportiva. It's a company based in the Italian Alps that makes shoes for mountain sports. And this is its North American headquarters. Jonathan Lance is in charge of this region of the business. He says the shoes come from all over the world before they're shipped to retailers and customers.
Italy, Romania, China, Vietnam. Las Portiva is sending all these shoes here to Boulder because it's a destination for outdoor enthusiasts. Climbers flock to the slanted flat irons that rise dramatically just outside the city. We're a very big part of the U.S. rock climbing business, and so it makes sense to have us centered here.
But Lance says it's not clear what the U.S. market will look like for this global company going forward because of President Trump's chaotic tariff moves. It's now more expensive for Lance to bring shoes to the U.S. to sell here. You can't absorb that. You can't sell a product to a retailer like REI and lose money.
He says the company will probably need to raise prices for consumers. That's even though President Trump put higher country-specific tariffs on hold until early July.
It's a constant juggle. It's also been a juggle for Travis Campbell. He's the owner and CEO of adventure travel company Eagle Creek. It manufactures in Indonesia, duffels in those packing cubes for organizing clothes in luggage. Campbell says he's happy Trump paused some tariffs for a little while. But it actually doesn't change anything because we don't know what's on the other side of those 90 days.
Eagle Creek is based in Steamboat Springs, Colorado. Campbell says faced with an additional 32% fee on Indonesian imports, he held off on salary bumps and hiring. We had a big discussion around, like, does the 90-day pause give us confidence to push through those increases? And it doesn't.
The Trump administration claims these policies will entice manufacturing back to the U.S., but Mallory Otariano says that would take a long time. Her company, Ewer, sells colorful fleece hiking dresses and floral athletic shorts. The clothes are made in the U.S. in a Los Angeles factory, and she's been posting on social media about how tariffs are still affecting her business. Some of her fabric comes from China.
And there's always tons of people in the comments saying, well, just make it yourself. But Otariano says that's not realistic. The infrastructure to create a fabric mill is absolutely intense. The talent and workforce does not exist in this country. The scale that's needed to support apparel is not existing in this country anymore.
She hopes Made in America will have its moment, but she worries more about consumers tightening their spending and maybe passing on bright, funky-patterned outdoor clothes in an uneasy economy. In Boulder, Colorado, I'm Rachel Cohen for Marketplace. This final note on the way out today, a big question looming over Republicans' big tax cuts package.
is how to pay for the loss of revenue. Today, President Trump suggested he's open to the idea of raising taxes on the rich. On his Truth Social platform, Trump said he would graciously accept even a tiny tax increase on top earners, saying, quote, "Republicans should probably not do it, but I'm okay if they do!" Triple exclamation point. Mixed message much?
Our theme music was composed by BJ Lederman. Marketplace's executive producer is Nancy Fergali. Donna Tam is the executive editor. Neil Scarborough is the vice president and general manager. And I'm Amy Scott. Have a great weekend. We'll be back on Monday. This is APM.
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