Fed officials speak up on inflation

0:00This Marketplace podcast is brought to you by Welton Hansman, who asks, how healthy is your financial plan? Does it need a second option? You'd get one before surgery. Isn't your financial health just as important? Get a Welt Blueprint at no cost. We'll check the pulse on your plan, share what you might be missing, and opportunities you could be taking advantage of. And determine whether your current advisors are a quack. Learn more at WeltonHansman.com slash build. Want to know what the Fed is thinking about interest rates in the economy? Some officials are more open than others. From American public media, this is Marketplace. In Denver, I'm Amy Scott in Forkai, Rizdal. It's Thursday, September 24th. Good to have you with us. If you've been listening to the show so far in the Kevin Warsh era of the Federal Reserve,

1:04you know that the current Fed chairman likes to hold his cards close to the best. He's been clear he thinks Fed officials have tipped their hands too much in the past about their future plans for interest rates. In Fed speak, this is known as forward guidance. But Warsh hasn't been able to keep everybody else quiet, especially this week. Marketplace's Nancy Marshall Gensers starts us off with more on what other Fed officials have been saying and why it matters. Just two days after the Fed were reserves meeting last week where officials voted to raise interest rates, Kansas City Fed President Jeff Schmitz said the Fed has worked to do on inflation. Then yesterday, Fed Governor Michael Barr said this, inflation is above our 2% target and not clearly trending toward target in a timely way. We heard from several more Fed officials today, including New York Fed President John Williams. He said it's reasonable to think another rate hike may be appropriate by the end of the year. Danielle D. Martino Booth CEO at QI Research is not surprised by the cavalcade of Fed chatter.

2:11There is no corralling Fed speakers. None zero zip out. D. Martino Booth says some Fed officials are openly advocating for a rate hike. Others want to see how upcoming inflation data plays out. Sarah Binder, senior fellow at the Brookings Institution says all these comments from people at the Fed can smooth the way for future interest rate decisions. That's how the Fed moves interest rates. It's through transparency communication. Nationwide Financial Market Economist Orrin Clatchkin says these Fed speakers realize they can no longer act as though inflation caused by high oil prices and tariffs is temporary. We're facing more and more of these supply side shocks that are not just one off things and that they're also lasting for longer. Clatchkin says last week's interest rate hike may not be enough to cool the economy and beat back inflation. He expects two more rate increases this year. I'm Nancy Marshall Genser for Marketplace. On Wall Street today, more drama in the bond market. We'll have the details when we do the numbers.

3:28The number of people filing for first time unemployment benefits fell last week. Another sign that the job market is holding up pretty well overall. The Labor Department said today the four-week average fell to just over 202,000 near 50-year lows. We'll get more data on layoffs early next week when the job openings and labor turnover or Jolt survey comes out for August. When people do get laid off odds are they're switching to an entirely different job. That's according to the career transition company LHH, which tracked more than 400,000 layoffs and found that 58% of those workers moved into different jobs or even industries. That percentage hasn't changed much over the past few years. What has changed is why. Marketplaces' Kaley Wells walks us through the findings.

4:33Once upon a time as in the mid-20th century, the job market was more centered around manufacturing in construction. So it was more cyclical, says Guy Berger, with the Burning Glass Institute. It's you have these layoffs and then eventually the inventories roll down and you start producing stuff again. People get recalled back to work. He says by the 1990s that cyclical job market was pretty much gone. And so now you have these permanent layoffs where like you lose a job and the job's gone. So more often unemployed people have to find something different. Today careers they are most likely to leave include customer service, logistics and office support. It's largely due to the digital transformation that companies are going through and a lot of the AI disruption. John Morgan is president of LHH, which released the report. He says not all of the disruption is because of AI. We've been walking into Panera and ordering sandwiches on tablets for a while now. We've had chatbots on websites for a long time. We've had a lot of workflows being automated

5:35by robots for a long time. Many of the roles that workers abandoned are what Michelle evermore with the National Employment Law Project calls foot in the door jobs. Where you actually may be seeing people transferring to something more consequential. Evermore says leaving an office assistant job isn't bad news when it means getting promoted to say project manager. I'm Kayleigh Wells from Marketplace. Sales of new homes hit an eight month high last month as home builders offered incentives like interest rate buy downs to attract buyers. Still sales were down 2% from August of 2025. And as we heard yesterday from Marketplace's Sabri Benachure, the recent rise in mortgage

6:36interest rates is likely to depress home sales and building. Fresh data from Freddie Mac today put the recent average interest rate on a 30 year fixed at 7.03%. But there is no one housing market in this big diverse country. So for a view from the ground, we called up one of our real estate regulars. Latisha Grant is executive managing broker with TAS Realty Group. Good to talk with you again Latisha. Of course it's always just my pleasure. All right so how would you describe the Houston housing market right now? If I had to pick one word Amy this time I'm going to use the word unfable. Oh but we are doing a little bit of everything in some areas I would say buyers market in some areas I would say sellers market. So it really varies neighborhood by neighborhood like that? It's price point by price point so not necessarily neighborhood. It's definitely the price point that's making the biggest impact on how we feel about the market right now.

7:38Hmm okay well say more about that. Where are you seeing a buyers market and where you've seen a sellers market? So I will tell you a good example we just submitted an offer I showed a property over the weekend that was on the market for five days and we submitted an offer on Monday. We winnion they came back and they provided us with the invitations of some new offer by the time we got it over they received and accepted another offer. Oh no I know it's my poor buyer but this price point is in the mid 200 and it's not an affordable housing property so we just kind of went pretty quick. So that's an example of a house that is not big A affordable but but attainable there's more demand there. Yes absolutely absolutely and I think you know the of course I would say interest rates probably pay a big roll because people are buying the knee their affordability just so that they can ensure that they can afford the property and it's

8:39attainable. So where are you seeing buyers have more power? Ironically enough what's the builders? We have many of the builders that are coming in and they are reducing price points so we have a builder that's building two bedroom halls. There is just in the demand for it but the price point's not driving it they reduce the price under $200,000 so we have in South Houston builders that have properties and not far from downtown so you know not extremely outside of our range but they are under 200,000 and they just reduced it say in the low 190s. Wow so it's used in a market where there still are the proverbial starter homes. It's still possible for first time buyers to get in for a relatively reasonable price. So we still have those starter homes and if you're you know very low low or moderate income we still have down payment assistance that exists.

9:40If you're willing to go out just a little bit outside of that popular area you can definitely see what Texas and what Houston is known for those low price point properties. So I know people were kind of hoping that the market would pick up in the spring and summer and with interest rates staying high there hasn't been as much volume nationally but what do you see in Houston or how would you say the kind of busy typically busy spring and summer selling market turned out? Yeah the typical busy spring and summer market really didn't hit us the way that we had anticipated or the way that it had historically. I do believe that now I believe next summer in spring or spring and summer is going to look a lot nicer because we are seeing buyers coming back to the market they're just trying to find their groove so to speak you know where is their sweet spot to be able to purchase but yeah I would agree we didn't see the influx of buyers that we thought we were going to but we just see the entering back into the market.

10:46Well I feel like you're always an optimist when we talk. What's giving you more is that fair? I would agree I would agree. What's giving you hope about next year? What do you think could change to I don't know if normals are right word? What do you think could change? Well I'm just just to be honest you know people we always need to place the leaves that's the one thing that will never change so with that being said I think it's just taking everyone a little bit of time to settle into our new reality and soon as that happens sooner it's better off we are as real estate professionals but just kind of educating more our communities more about what it means and how do you overcome that's one of the reasons that I'll make sure we have some mistake in addition to that you know being located here in Houston we just have so many different affordable opportunities such as down payment assistance so those are probably the reasons.

11:49Leticia Grant is a task-reelty group she's the executive managing broker there thanks as always we're really good to have you on always a pleasure thank you and I you coming up they want a perfect potato and who can blame them really but first let's do the numbers the Dow Jones industrial average lost 161 points 3 10s percent a close of 51 3 49 the NASDAQ added 3 points essentially flat to finish its 26 9 39 and the S&P 500 lost just one point also we'll call it flat to end at 7704 Starbucks is set to close 250 under performing stores in North

12:52America which represent about 1% of its stores in the region Starbucks shares fell half a percent bonds fell the yield on the 10 year teen out rose to 5.21% the highest since 2007 you're listening to marketplace you didn't start your business dreaming about payroll tax deadlines yet there they are every quarter sitting on your desk gusto handles that part quietly in the background so you can stop dreading the calendar gusto is online payroll and benefits software built for small businesses it's all in one remote friendly and incredibly easy to use so you can pay higher on board and support your team from anywhere with automatic payroll tax filing simple direct deposits health benefits commuter benefits workers comp 401k you name it gusto makes it simple and has options for nearly every budget and you'll get direct access to certified HR experts to help support you through

13:53any tough HR situation try gusto today at gusto dot com slash marketplace and get three months free when you run your first payroll that's three months of free payroll at gusto dot com slash marketplace one more time gusto dot com slash marketplace this marketplace podcast is brought to you by wealth enhancement who asks how healthy is your financial plan does it need a second option you'd get one before surgery isn't your financial health just as important get a wealth blueprint at no cost we'll check the pulse on your plan share what you might be missing and opportunities you could be taking advantage of and determine whether your current advisors a quack learn more at wealth enhancement dot com slash build today's episode is brought to you by apple ads ads on apple maps are changing the way local businesses get discovered reach customers when it counts right when they turn I'm looking into I'm going there in decision making mode actively searching for

14:56businesses like yours and deciding where to go customers can easily call you visit and more from the same place they're viewing your ad and all of this happens on apple maps a privacy first environment that respects customers and helps them discover new places get started with ads on apple maps today and for a limited time receive 15% credit back on your monthly ads spend for a year up to $1,000 per month terms apply head to ads dot apple dot com slash maps to get started try business like never before with ads on apple maps this is marketplace I'm Amy Scott as you have no doubt heard by now we're on the cusp of what's shaping up to be a super elm nino an extreme version of a weather pattern that occurs every few years during which warm water in the Pacific Ocean gets pushed towards the west coast often

16:00resulting in heavy rainfall throughout the southern US and warmer drier conditions in the north the potential damage which could include extensive flooding is of interest to people like Dan Ward he's the senior director of model development at Karen Clarkon company a catastrophe modeling firm that helps insurance companies manage their risk Dan good to talk with you again thanks for having me all right so we will get to the potential super elmino we're facing but first can you talk about how you and your colleagues usually factor in elmino when it happens sure yeah so when we are developing our catastrophe models we are building models of hypothetical scenarios and so in that context we're actually looking ahead to future years or in one way thinking about it is many many iterations of what next year could look like and if that's going to be an elmino year then on average we might expect say fewer hurricanes in the Atlantic and more hurricanes in the

17:02Pacific but that doesn't tell us what the loss is going to be in a particular year because that depends on not just the frequency of events but also where they happen and you can have one really bad event in a year that causes a huge amount of loss even if it was to an atmospheric scientist is a very quiet year so as we said in the lead this is looking like it's going to be a pretty strong elmino I guess super isn't a technical term but that's what folks are calling it what is your outlook for potential damage well it depends on what region of the globe we're talking about so during a anelinino and in a particularly strong elmino like the one that is occurring right now a lot of the activity in a sense shifts toward the Pacific where we've seen a lot more hurricanes and typhoons as they call them in the western Pacific impacting places like Japan and China and we've even had a couple hurricanes you know pass very close to the Hawaiian islands which is quite unusual well well many other regions that are likely to be affected have had some pullback

18:09from insurance companies in recent years I'm thinking of California where more and more people are are on the state's fair plan because they struggled to get private insurance could that affect how these communities and individual homeowners are able to respond if if there's a lot of flooding or storms yes absolutely and there's there's a lot of different reasons why insurance companies have been pulling out of California in some ways and it does affect people's ability to get coverage for perils like wildfire for example then some somewhat good news unless you call it good news but during an elmino year we actually expect to see more rainfall and potential for flooding in a place like California and so this can actually depending on the timing of that rainfall can actually cut short the wildfire season but at the same time maybe increasing the risk from from flood yeah and I read recently that in California very few homeowners actually have flood insurance which seems especially dangerous in the super elmino year

19:16yes it is but this is this is typical across the United States so if you if you own a home you are going to be insured against damage from things like wildfires and things like wind damage from hurricanes or strong thunderstorms but not against flood in order to be protected against flood generally you're going to need to have separate flood insurance and so it's usually only homeowners that live in very susceptible and vulnerable areas that are going to purchase that extra flood insurance and get that extra cover so only a small percentage of of U.S. homeowners actually have flood protection so none of this has really materialized yet but what are you going to be watching for in the coming weeks and months well in short term I'm still actually watching the Atlantic but you know this we're getting toward the second half of the season now and focus particularly on the West Caribbean Sea and the Gulf of Mexico where we expect to see more activity in the later half of the hurricane season here in the Atlantic and then even longer term I'm thinking

20:20about next year already and what's going to happen are we going to see El Nino transition into a potentially a strong Leninio which can happen after a strong El Nino not every time but it can happen so we're thinking about that already and what does a Leninia mean for what you're following a lot of the ways it in a lot of ways it's opposite of El Nino so instead of fewer hurricanes in the Atlantic we expect more hurricanes in the Atlantic during a Leninia and sometimes reduced activity in areas of the Pacific so in some ways it's kind of the opposite so as someone who's you know constantly watching storms I actually sat with you as Hurricane Ian made landfall in Florida a few years ago are you kind of unfazed at this point when you see these things coming well every storm is actually very unique in a way and so every event is a little bit different in the way we approach

21:21it has to be a little bit different so I would say that we have all the tools at our disposal to do what we need to do to simulate the event and to estimate the impacts on the insurance industry but also there's still that variety where every storm is different. All right well Dan Ward it's good to talk to you again he's the senior director of model development at Caron Clark & Company thanks so much. Thanks Amy. We did a deep dive on catastrophe modeling and insurance a few years back on our climate podcast how we survive including that story of tracking Hurricane Ian check it out at Marketplace.org or your favorite podcast platform. A wetter fall and winter would be welcome news for a lot of farmers in the American west after

22:34facing extreme drought and record-setting temperatures this year. Last year it wasn't so bad though in fact the 2025 growing season was particularly good for one staple crop potatoes but as Colorado public radio's Dan Boyz tells us sometimes you can have too much of a good thing. Bob and the TV married into a potato family he moved to Colorado's San Luis Valley in the 80s so we dig in the field every day my son and I he reaches into rich dark earth and pulls out a cluster of small golden columbas potatoes one of about a half dozen varieties he farms Idaho is the undisputed heavyweight champion of potato production in the US but Colorado is no slouch the state ranks second nation wide when it comes to a specific market the fresh market the potatoes you buy in the produce section at the grocery store the distinction is we don't have any processing per se we don't make

23:38french fries or potato chips ours all go to retail establishments restaurants things like that but this year it's been more complicated because this is one of the worst price years I think I've probably experienced in my 40 plus years with 2025's potato weather being so ideal all across the country farmers grew way too many and potato prices have tanked a semi truckload of russets rolls up to skyline potato company here in the valley they dump out onto this line of machines that sorts them by size and sifts out rocks worker Joe Mondragon is on the line to picking out the occasional spud to pluck what look like roots oh we're just taking up the sprouts where they've started a girl they start getting sprouty when they get in the mold these potatoes have been in storage bins for months skyline is a middleman company between the farmer and the grocery store

24:39less all to ready is the manager we wash them great them put them in cartons for the consumers this truckload of potatoes is totally fine they're a little small maybe misshapen just as edible they're not going to a grocery store a grocery store won't buy them because when there's an oversupply they want a perfect potato perfect size perfect shape and for a rock bottom price thank you very much there's almost no demand for this truckload of small lumpy potatoes all already says he's had to be especially nimble this year making new agreements with out of state processors getting them to take a little more of the stock to make potato salad or something like that helped us get the product moved the grower still getting a little bit not much but he's not having to pay to have it hauled off somewhere farmers also send some of these unwanted potatoes to help feed cows they donate to food banks but at some point they're still just too many so this

25:43year an abnormally high percentage of them have been destroyed dried out broken up and buried it's a last resort and it's hard to know how many though local estimates put it at a hundred million pounds of potatoes across the valley destroyed so we do a flyover to count acres get a rough estimate there is a strange silver lining in this tater tail this year's drought across the west has not been good for potato production bob motivi says farmers have planted fewer acres so we're hoping that that will be good for the market so we won't be oversupplying the market and have another bad price here if prices get back to what the farmers are used to of course that's good for them though it also means the spuds you buy in the produce section might not be so perfectly shaped in Colorado's San Luis Valley I'm Dan Boyce for marketplace

26:52this final note on the way out today it's the time of year when spirit Halloween stores are popping up in strip malls and vacant storefronts all over the country and there are lots of vacancies to fill after some big retail bankruptcies axios found that the most common previous occupant of a spirit Halloween was Joanne fabrics the beloved by many craft chain that went out of business last year 153 of the stores analyzed by axios were former Joanne's locations big lots came in second with 103 and former spirit competitor party city was close behind at 100 stores and if you think it's too early to be shopping for Halloween clearly you don't have a 12-year-old in your house group costume already locked in and ordered our daily production team includes Andy Corbin Mika Ellison Maria Hollenhorus Sarah Leeson Sean McKenry and Sophia Torenzo will story is the supervising senior producer I'm Amy Scott hope to see you back here tomorrow

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