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cover of episode The Fed's got an interest rate decision to make

The Fed's got an interest rate decision to make

2025/6/16
logo of podcast Marketplace All-in-One

Marketplace All-in-One

AI Deep Dive Transcript
People
A
Alan Collard-Wexler
A
Anne Owen
B
Brian Reeling
D
Dottie Myers
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Emily Blanchard
H
Henry Epp
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Ishwar Prasad
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Jennifer Lee
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Jenny Schutz
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Josh Spores
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Mark Olson
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Neil Saunders
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Ole Luchens
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Patrick Fleming
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Philip Bell
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Rashad Kossum
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Teresa Ford
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Yelena Sholetyova
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Zach Stambour
Topics
Anne Owen: 我认为目前最大的难题是五月份的通货膨胀为何如此之低。几个月来我们一直听说关税会推高物价,但五月份的通货膨胀几乎没有变动。这可能因为消费者需求低迷,或者公司为了赶在关税生效前囤积了库存。 Yelena Sholetyova: 我观察到消费者可能正在减少购买。 Emily Blanchard: 关税本应鼓励企业增加国内生产,例如购买更多的国内钢铁和铝,但这会被其他因关税而变得更昂贵的产品所抵消,使得整体经济形势难以判断。 Jennifer Lee: 现在担任央行行长非常不易,因为很难判断国家经济是会强劲增长还是会崩溃。地缘政治风险、贸易风险以及关税的不确定性都对央行决策造成影响。 Ishwar Prasad: 许多国家的通货膨胀似乎得到了控制,但经济增长前景黯淡。在不确定性面前,不作为对央行行长来说可能是一种谨慎的做法。 Brian Reeling: 预计本周美联储不会采取任何行动,维持利率不变。目前经济和就业市场表现良好,没有理由立即做出改变。美联储将保持观望,直到特朗普总统的关税和减税政策对通货膨胀和增长的影响变得更加明朗。

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You want data, J-Pal? We got data from American public media. This is Marketplace.

In Los Angeles, I'm Kyle Risdell. It is Monday today, the 16th of June. Good as always to have you along, everybody. Let's do a little What is Jay Powell Thinking as a way to get going today, huh?

Spoiler alert, I have no idea. It's been a while since we've heard from the Fed chair. But if what's past is prologue, as members of the Federal Open Market Committee start their fourth meeting of the year tomorrow, it is a very, very safe bet that Powell and the gang will have been pouring over the data trying to figure out what exactly is going on in this economy. Data-wise this week,

We've got May retail sales tomorrow, also industrial production for last month, as well as business inventories for April. That's important to know how much stuff companies had on hand during that really volatile month, if you remember back to April. Marketplace's Henry Epp has more on what all that data might be telling us and what it might be telling the Fed about this moment in this economy.

These kinds of data releases are puzzle pieces that can help answer larger questions about the economy, according to Anne Owen at Hamilton College. And right now, I think the big puzzle is, why was inflation in May so low? We've been hearing for months now that tariffs would drive up prices, but inflation barely budged in May. Data this week could help tell us why. Owen has some theories.

One is consumer demand is low, and the other would be that firms had stockpiled some of their inventories in order to kind of get ahead of the tariffs.

April's inventory numbers tomorrow will show what businesses were doing as the president imposed, then paused, his so-called Liberation Day tariffs. Meanwhile, retail sales will give us some insight into consumer demand in May, after consumers did a lot of shopping in March and April to try to get ahead of tariffs. Yelena Sholetyova is at the conference board. People pulled their purchases forward.

myself guilty, you know, purchased a couple of kids shoes and stuff like that ahead of what we thought tariffs would look like. Now, she says, consumers may be pulling back. Amid all that, tariffs are supposed to encourage companies to make more things in the U.S., which industrial production helps measure. For example, says Emily Blanchard at Dartmouth, companies might buy more domestic steel and aluminum now, which would increase production.

But they're pairing those metals purchases with a bunch of other products that also became more expensive because of other tariffs. All these moving parts, she says, make it really hard to get a full picture of where this economy is going. I'm Henry Epp for Marketplace.

Nothing happens in a vacuum in this global economy of ours, of course, not even central bank meetings. The Swedish Central Bank and the Bank of Japan met today and tomorrow. The Fed, Switzerland's National Bank and the Bank of England coming up later in the week.

And it's not like they all outright coordinate, but they are all generally aware of the factors affecting all the rest of them. And as Marketplace's Mitchell Hartman reports, right now, the economic winds blowing on these central banks are swirling in a whole lot of different directions.

It's not an easy time to be a central banker. Trying to figure out whether your national economy is in for strong, steady growth or about to crater, says Jennifer Lee at BMO Capital Markets in Toronto. There's geopolitical risk from the Middle East, trade risk from the U.S. The uncertainty over tariffs, whether or not they're going to happen, be at these levels, whether or not they're even legal, for goodness sakes. Central banks also have specific economic issues to deal with.

In Japan, the economy has been improving after decades of stagnation. Wage is starting to pick up and consumers are starting to spend a little bit. Unfortunately, inflation remains stubbornly above target. They're uncertain about how much all the tariffs are going to hurt exports. At some point, they're going to have to start raising rates. Most other global banks, Switzerland, Sweden, England, are likely to cut rates soon. Cornell economist Ishwar Prasad explains.

There are many countries where inflation does seem to be coming under control, while economic growth looks pretty bleak. But Prasad also says there's hesitancy. As some of the Hindu scriptures say, inaction is a very important type of action.

The default option for central bankers, which is to do nothing, can be a prudent approach given all the uncertainty. Nothing, no change in interest rates, is what's expected from the U.S. Federal Reserve this week, says Brian Reeling at the Wells Fargo Investment Institute.

The economy is doing okay. Employment markets look okay, so not really a reason to make an imminent change. He predicts the Fed will hold tight until it becomes clearer how President Trump's tariffs and tax cuts impact inflation and growth. I'm Mitchell Hartman for Marketplace. On Wall Street today, traders must have had a pretty good weekend because they were in a buying mood. We will have the details when we do the numbers.

The steel industry update of this Monday comes to us via Pittsburgh, Pennsylvania, headquarters, of course, of U.S. Steel, the purchase of which by Nippon Steel was approved by the White House and the conditions agreed to by the two companies over the weekend. Steel has, as we all know, been much in the news of late, tariff news specifically, and President Trump's doubling of the import taxes on it to 50 percent, 5-0 percent.

That is going to hit big chunks of this economy and consumers in it. But domestic steelmakers have been investing in new capacity ever since the first Trump steel and aluminum tariffs back in 2018. So Marketplace's Justin Ho went to see how steel has been growing, starting at a new steel mill being built in Southern California.

The mill is being built in the Mojave Desert, about 90 miles north of downtown Los Angeles. Right now, an excavator is digging a hole so workers can install a water main. So right now we're in the process of welding sections of that pipe together.

These are the very early stages of this project, says Mark Olson. He's VP of Mill Operations with Pacific Steel Group. It cuts, bends, and installs rebar for use in construction projects. And once the plant is open in a few years, it'll make its own rebar too. This project is for us to really vertically integrate and now produce our own reinforcing steel so we're not beholden to out-of-state producers.

The facility will make that rebar by melting down scrap metal. Olson says that's a big reason why the company is building here in the Mojave Desert, because the nearby L.A. area has plenty of scrap metal. And most of that gets put in containers and shipped overseas. The rest gets put in rail cars and trucks and shipped out of state where steel is manufactured. So this is an opportunity for us to localize that supply chain.

Olson says the president's new metals tariffs didn't have any bearing on the company's decision to make its own steel. But, he says, those tariffs certainly didn't hurt. We want to be sure that we're not unfairly impacted by steel coming in that's either subsidized or produced illegally.

and not playing by the same rules, if you will. Ever since the first Trump administration imposed steel tariffs in 2018, there has been a wave of investment in domestic steel production. And now assets are being built and turned on and ramped up in the U.S. Josh Spores, a steel analyst with CRU Group, says a big reason is that between those tariffs and all of the supply chain congestion early in the pandemic, steel prices rose.

And steel makers wanted to cash in. Any price increase went directly to the bottom line, and that just further incentivized new plans for further investment in the U.S. Spores says domestic steel production will grow in the coming years as more new mills come online. Philip Bell, the president of the Steel Manufacturers Association, says most of them will operate like the one in Mojave. They'll make steel by melting down scrap metal.

Right now, about 70 percent of all the steel that's made in the United States uses ferrous scrap metal as its primary raw material and electricity as its primary energy source. Bell says compared to the old-fashioned methods of making steel, like, say, coal-powered blast furnaces, the electric method is much better for the environment.

We're not mining iron ore. We're not mining coal to make this steel. We are taking steel and basically remaking it into steel again. But there are limits to the economic benefits of domestic steel production. Alan Collard-Wexler, a professor at Duke University, says modern steel manufacturing is incredibly sophisticated and it requires a lot of automation.

There's labor intensive and not so labor intensive parts of the economy. And steel is just one of these not so labor intensive parts of the economy. And even though the domestic steel industry is being protected by the Trump administration's tariffs, the manufacturing sector, which buys steel, is going to end up paying more for it.

because those tariffs will lead to higher steel prices across the board, says Teresa Ford, a professor at Dartmouth. And, you know, when your costs go up, you have to raise prices and then consumers buy less. And so those firms end up shrinking. All the firms that rely on steel as an input will shrink.

A recent paper written by researchers at the Federal Reserve Board of Governors found that the 2018 steel and aluminum tariffs caused producer prices to rise and manufacturing employment to fall. I'm Justin Ho for Marketplace. Speaking of retail sales, as Henry Epp was a couple of minutes ago, there is an especially disturbing retail trend to make you aware of.

Not only is pumpkin spice extending its sickly sweet reach into summer, Halloween merchandise is hitting store shelves. Now it's June. They've even given the extra early rollout a catchy, I guess, name, Summerween. I'm not making this up. Marketplace of Megan McCarty Carino went to check it out.

To get the feel for summer ween and action, I visited my local Michael's store in Northern California and skulked through the aisles with my microphone. There are one, two, three, four entire like giant racks full of Halloween stuff. We've got a whole disco ball Halloween section, disco ball skulls, disco ball black cats.

Apparently, disco is this year's vibe for Summerween after hippie Halloween hit big last year. It's almost like Halloween now is becoming the new Christmas. Derek Moore runs the spooky-themed YouTube channel The Black Hearts Club. He posts about all the Halloween product drops at Michaels, Target, and Lowe's, where he's got his eye on an animatronic heavy metal skeleton band.

Animatronics is the big thing for Halloween, and you'll see everything from Grim Reapers to big jack-o'-lanterns and everything just lumbering around in people's front yards. The creep of a ghoulish holiday into this sunny season might seem a bit odd to some, says retail consultant Neil Saunders at Global Data. It's like, look, it's summer. I don't want to see pumpkins and pumpkin spice. But honestly, retailers do make the sales.

Because they're giving consumers an occasion to spend, even when many are spooked. And not in a fun way, says e-marketer analyst Zach Stambour. Picking up a candy-colored pumpkin that they can put on Instagram is a small indulgence that they can still splurge on. And they might have more room in their budgets now before the end-of-the-year spending spree. I'm Megan McCarty Carino for Marketplace.

Coming up... You know, if you don't like sand, you shouldn't be living here because this is all part of it. In this neighborhood, beware the sand, man. But first, let's do the numbers. ♪

Dow Industrial is up 317 points on this Monday. Three quarters of 1% finished at 42,515. The NASDAQ up 294 points. That is 1.5% on that index, 19,701. S&P 500 gained 56 points, 9 tenths percent, 6,033. Justin was talking about the steel industry.

Let's talk about them and some users. Charlotte, North Carolina-based Nucor dipped two-tenths of one percent. U.S. Steel headquartered, as I said, in Pittsburgh, PA. Soared five percent today. General Motors, they use a lot of steel. Based in Detroit, obviously, ratcheted up one and three-tenths of one percent today. Carrier Corporation,

HVAC, refrigeration systems, that's what they do, based in Palm Beach Gardens, Florida, should you be curious. Cooled three-tenths of one percent. Megan McCarty Carino was talking about the latest form of holiday creep. Some of the stores where this trend is most prevalent, Michaels and Hobby Lobby, they are privately held. But Target, where you can shop for a variety of holidays year-round on the holiday shop section of its website, just because, racked up two-tenths, two and a tenth percent, rather. Bonds down, yield on the 10-year T-note up 4.45%. You're listening to Marketplace.

The Jeep brand has always stood for American freedom. And now we're standing with you with Employee Pricing Plus. Hurry into your Jeep brand dealer for details today and join the family. Jeep, there's only one. Offer valid on select 2024 and 2025 Jeep brand vehicles for non-FCA employees and retirees. $200 admin fee applies. Not all buyers will qualify. Restrictions apply. Does not apply to leases. Ends June 2nd, 2025. Jeep is a registered trademark of FCA US LLC.

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The Jeep brand has always stood for American freedom. And now we're standing with you with Employee Pricing Plus. Hurry into your Jeep brand dealer for details today and join the family. Jeep, there's only one. Offer valid on select 2024 and 2025 Jeep brand vehicles for non-FCA employees and retirees. $200 admin fee applies. Not all buyers will qualify. Restrictions apply. Does not apply to leases. End 63025. Jeep is a registered trademark of FCA US LLC.

Now at Verizon, we're locking in low prices for three years guaranteed on MyPlan. And you can get a single line for just $45 a month when you switch and bring your phone. That's our best price ever on unlimited welcome with auto pay plus taxes and fees guaranteed for three years.

Because at Verizon, we got you. Visit your local Chicago Verizon store today. $20 monthly promo credits applied over 36 months with a new line on unlimited welcome. In times of congestion, unlimited 5G and 4G LTE may be temporarily slower than other traffic. Domestic data roaming at 2G speeds. Price guarantee applies to then current base monthly rate. Additional terms and conditions apply. This is Marketplace. I'm Kai Risdahl. You fire up Netflix, you hear that ba-bum sound, and then what happens? You get the home screen, right?

Well, for the first time in more than a decade, that Netflix home screen is getting a redesign. Among the changes, the movies and shows you see on it are going to change in real time, adapting to how you are browsing.

You linger a little longer on that Adam Sandler rom-com trailer and you're going to get more of the same for better or for worse. The point is, whether it's Netflix or Disney Plus or HBO Max, that streaming homepage real estate is incredibly valuable. What titles you see, where you see them, how often you see them, all of that influences what you actually watch and who actually makes money from what you actually watch. Marketplace's Matt Levin is on it.

Let's start at the top of your streaming home screen, that big poster-like image or autoplay clip that eats up like half your TV. Netflix calls it a billboard. Other streamers call it the hero position. On Disney+, it's a rotating carousel. And leading my Disney Plus carousel at the moment is a close-up of Elizabeth Moss in a white bonnet and red robe.

The Handmaid's Tale series finale, this is there because it's the hottest piece of property that the Disney empire currently has to stream. Ole Luchens was VP of product design at Disney streaming for six years. I'm sharing my screen with him over Microsoft Teams. He says the carousel is incredibly valuable real estate. It's the Saks Fifth Avenue area.

one of the five windows they decorate for every season. It's the big, beautiful display of the best stuff that we have to offer that's supposed to draw you in. That's probably because audiences are more likely to watch the first big, shiny show or movie they see after they log in. But the carousel is also subliminally seeding what you may want to watch in the future. There is the subconscious desire

emotional knowledge that we're loading you up with that might pop up in your brain just as a behavioral moment, as a habit later. Most of what's in the Disney Plus carousel is content from Disney, stuff from Pixar or FX or Hulu, all of which Disney owns. But like most other streamers, Disney Plus also offers shows and movies they license from other film and TV companies. You just might have to search a little harder for those. Right.

The drama movies, you might find something of ours in there. Rashad Kossum is trying to find one of his company's movies in my Disney Plus home screen. It's taken a couple minutes. You see right at the front, these are all owned titles. Hulu, FX, Disney, Hulu, FX, Disney, rinse and repeat. So they're really pushing that stuff forward. Kossum heads content licensing and strategy at Shout Studios.

It owns the rights to films like the 90s Keanu Reeves thriller Point Break and the stop-motion classic Coraline.

With ad-supported streaming services, Shout and a streamer split the revenue every time an ad is run before or during Shout titles, which is why Kossum tries to negotiate that his titles get a prominent position on a streamer's home screen. That placement, a hero placement like this at the top or like front and center in the first trays, that translates into a lot of money. Percentage-wise, it could be anywhere from a 25% to 50% boost.

Kossum also tries to make sure that after you watch another action movie from the 90s or John Wick or some bank heist movie, Point Break appears in one of those because you liked or recommended for you rows.

But those placements are trickier. To paraphrase Severance, the algorithm is mysterious and important. Nowhere is the algorithm more mysterious or important than the biggest baddest streamer on the block, Netflix. Think of our job as trying to be an incredible matchmaker. Patrick Fleming is senior director of product at Netflix. And then when you click play, you sit back and you go...

that was the right one. While that carousel at Disney plus is curated by human marketing teams, Netflix is home screen is heavily influenced by what the algorithm thinks you'll like based off your viewing history. The enemy for Fleming is decision fatigue. So to help you figure out what you want to watch when you don't really know what you want to watch, Netflix is piloting generative AI. So I'm typing in something. If I am, they,

Exhausted. Fleming is demonstrating Netflix's new AI natural language tool, now only on its mobile app. The underlying tech is the same as what powers ChatGPT. Okay, the first recommendation is Headspace Guide to Meditations.

That's what popped up on Fleming's Netflix account. Wonder if my algorithm knows if I'm exhausted, I'd be more in the mood for point break. I'm Matt Levin for Marketplace. ♪♪♪

You buy a house and once you figure out that you can make your monthly payment and some extra for maintenance and the occasional repair, you might think you've got a good handle on homeowning expenses.

You, of course, do not, because there's always something. There's a guy in Michigan who knew from the very beginning that his experience with his home was going to be all about spending money. Michigan Public's Laura Weber Davis has this story of man versus sand. Silver Lake is about a mile from Lake Michigan, and all around are rolling sand dunes more than 100 feet high.

People come from all over to enjoy the dunes at this state park, and sometimes they end up on Dan Beam's property. We say, you know, you have to stay off from the property, and they'll walk on the edge of the dune and say, well, you can't own a dune. And I'll say, yeah, but I do. Dan owns the house right where the dunes meet the neighborhood. On a windy day, the dune blows in towards his cottage, sometimes by a foot or more.

And he's been pushing the sucker back with a front-end loader for several years, with the help of a friend, Frank Pfaff. See right now, the old sand machine's working pretty good right now. Does this kind of day give you heartburn? Yes.

Yes. The dune is moving because of wind, yes, but it's also because there's a huge recreational dune buggy park here. The sand is never really allowed to settle. In fact, there's at least a handful of houses that have already been consumed by the sheer volume of sand. Dan bought this house in 2020, determined to do battle. If we didn't buy it, we didn't know if anybody else would.

And that meant that this would be covered by a dune and that the two cottages that are next door, which are my mother's and mine, would be the next ones in line. That's right. Dan's family actually owns the first three cottages next to the dune. He bought the house next to the dune to save the other two. This house was built some 30 years ago with a three-story observation tower to get a good view of Lake Michigan. But now the dunes are so high that the view is just sand.

And that's where Frank and the front-end loader come in. He points towards the flat sand expanse in front of Dan's porch. My first goal is to make sure the house is safe. This year, the sand started about right here, and I've already taken that whole section down.

Frank fills a giant gravel-trained dump truck with sand and hauls it out, sometimes daily. They sell the stuff locally to construction sites, fracking operations, horse arenas. It also is good for sandbox sand, beaches. It's very pure sugar sand. They can haul away more than 1,500 semi-truck loads of sand a year. But this isn't like, you know, a profitable business.

Dan's hoping to break even for the first time this year. To him, this is all worth it. And he has reason to believe that he can save the house. We know that people tend to underestimate the likelihood of bad things happening to them. That's Jenny Schutz. She's an expert in housing policy and economy with Arnold Ventures. She says disaster-prone areas make the housing sector a vulnerable segment of the economy, particularly in the age of climate change.

People move to wildfire-prone areas or hurricane-prone areas thinking, it's not going to hit my house. She says people want to live near cool, natural places. On beachfronts, near mountains with great views, in places that have warm winters and lots of sunshine. But those same amenities often are the risks that are going to harm people and housing.

The thing with Dan Beam is he knows precisely the beast he's taken on. He successfully moved that dune back about 40 feet away from his house. So why do this? Dan will tell you right away. It's for his family.

Four generations enjoy these homes during the summer, and it's their favorite place to gather. Dan's mom, Dottie Myers, says sand is just part of the family. Yes, it is. You know, if you don't like sand, you shouldn't be living here because this is all part of it, part of our living experience.

And our grandchildren absolutely love climbing the dunes. We do as well. It's kind of interesting. It's a bit of a love-hate relationship with that dune then. It is a love-hate relationship. And it's a relationship he hopes his kids and grandkids will be willing to keep up, even as the sand keeps rolling in. At Silver Lake State Park in Michigan, I'm Laura Weber Davis for Marketplace. Music

This final note on the way out today in which oil traders looked at the Iran-Israel war and said, yeah, it's bad and scary, but not as bad and scary as it was a couple of days ago. Brent crude, the global benchmark, fell today despite new attacks down almost two percent, just shy of seventy three dollars a barrel up, obviously, since the end of last week.

Our daily production team includes Andy Corbin, Nicholas Guillaume, Maria Hollenhorst, Eru Ekpenovi, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Rizdal. We will see you tomorrow, everybody. This is APM. Personal finance isn't just about spreadsheets and investing. It's emotional. Talking to your partner about money, negotiating a raise. Even the smallest decisions, like splitting a bill, can bring up feelings of shame or anxiety.

I'm Rima Grace, host of This is Uncomfortable, a podcast from Marketplace about life and how money messes with it. In this season, we get into topics like workplace drama, tough financial trade-offs, and the quiet tension that builds when love and finances collide. Listen to This is Uncomfortable wherever you get your podcasts.