A new economic agenda takes shape in Washington

Summary

Marketplace Morning Report: A New Economic Agenda Takes Shape in Washington
Release Date: January 21, 2025

In this episode of Marketplace Morning Report, host David Brancaccio delves into the emerging economic strategies within the new Trump administration, market reactions, energy sector developments in Texas, and innovative approaches to bridging societal divides. The discussion is enriched with expert insights, notable quotes, and comprehensive analysis to provide listeners with a thorough understanding of current economic and political dynamics.

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1. President Trump's Economic Blueprint

David Brancaccio opens the discussion by highlighting President Trump's plans to convene with Republican congressional leaders to outline his legislative agenda. This comes in the wake of a series of executive orders aimed at steering the nation's economic direction.

Nova Safo, Marketplace's correspondent, adds depth to the conversation by noting the initial impact of Trump's policies:

"For all of the talk of what was to come on day one of the second Trump term, what actually came of it was rather muted, at least as far as he economic policy is concerned."
[00:24]

Mark Goldwine, Senior Vice President and Senior Policy Director at the Committee for a Responsible Federal Budget, critiques the administration's tariff policies:

"We heard there's going to be tariffs on day one. I didn't see tariff policy."
[00:33]

Goldwine further explains that while Trump hinted at imposing significant tariffs on Mexico and Canada, there has been no clear action regarding additional tariffs on Chinese imports or efforts to lower consumer prices:

"He directed all the agencies to start having prices front of mind. That's a reasonable ask. Does it solve inflation? Does it even reduce inflation? No."
[00:58]

Moreover, Trump has paused funding from the Bipartisan Inflation Reduction Act, raising questions about the longevity and impact of these executive decisions:

"Trump also ordered a pause in spending money from the Bipartisan Inflation Reduction Act... So it's unclear how long that pause will last."
[01:08]

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2. Market Reactions: Stocks and Bonds

Transitioning to the financial markets, Brancaccio reports a positive start for the stock market under the new administration:

"The Dow is up 0.8%, 340 points. Now the S&P is up 6.10 of a percent. The NASDAQ up 3.10%. The VIX index of stock market volatility is flat stable."
[01:48]

To unpack these movements, Jeffrey Cleveland, Chief Economist at Payton and Regal, explains the factors influencing bond yields:

"Last week we did see core CPI... it registered a bit softer of a reading than expected for the month of December. So I think this was good news... we still could see more interest rate cuts from the central bank."
[02:25]

Cleveland emphasizes that softer consumer inflation and the potential for Federal Reserve rate cuts have reassured the bond market, leading to lower bond yields.

Goldwine adds that the delay in implementing policy changes under the new administration has also calmed bond investors:

"There just isn't enough time when you have to make multiple speeches and zigzag across Washington, D.C.... if there is some delay... that could bring calm to the bond market."
[03:14]

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3. Energy Sector and Labor Developments

Brancaccio briefly touches upon fluctuations in crude oil prices and labor actions within major corporations:

"Crude oil is down two and a quarter percent now just above $76 a barrel. Workers at the warehouse style chain store Costco have voted to authorize a strike by the end of this month if there is no contract by then."
[03:49]

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4. Texas Power Grid and Clean Energy Initiatives

A significant segment of the report focuses on Texas' response to extreme weather threats and its push towards clean energy. Following a weather warning for snow and cold, Texas experiences high electricity demand with potential lower backup reserves. This situation harkens back to the 2021 deep freeze that caused widespread outages.

Elizabeth Troval reports on a new lending program designed to enhance energy resilience:

"In its first year, the program by the Clean Energy Fund of Texas hit $1 million in low interest loans for home projects like solar."
[05:32]

Mark Goldwine highlights the types of projects supported:

"Obviously it's batteries. There are H Vac systems... heat pumps, insulation."
[05:41]

Troval elaborates on the program's goals to reduce energy demand and protect homes during power outages:

"Projects reduce energy demand and protect homes if the power goes out."
[05:47]

The initiative, led by Clean Energy Fund of Texas CEO Billy Briscoe, collaborates with the Solar and Energy Loan Fund to expand its reach:

"Texas is like the Gold star proof of concept... we can serve low and moderate income communities with a low cost product."
[05:59]

This partnership aims to scale the Green Home Loans program, making sustainable energy solutions more accessible to underserved communities.

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5. Bridging Societal Divides Through Unconventional Means

Despite Trump's substantial Electoral College victory, Marketplace underscores the persistent societal divisions. The episode features Tane Danger, a professional improviser dedicated to reducing polarization through innovative dialogue methods.

Danger shares his journey of integrating improvisation with public policy training:

"We created a training that used best practices from communication theory, had some improv exercises in it... to help get people in that collaborative, we're going to figure this out together mindset."
[06:53]

He emphasizes the importance of making civic conversations engaging and enjoyable to foster genuine understanding:

"If you can create something where people are like, oh, I actually really want to be part of that conversation... it seems like it's a much better way forward."
[06:53]

Danger's approach aims to transform civic obligations into stimulating interactions, thereby encouraging more Americans to participate in meaningful policy discussions.

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Conclusion

David Brancaccio wraps up the episode by inviting listeners to engage with Marketplace's ongoing series on unusual jobs that contribute uniquely to society. The episode offers a comprehensive look at the interplay between political agendas, market responses, energy initiatives, and innovative social strategies shaping the current economic landscape.

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Note: Advertisements, introductions, and non-content segments have been excluded to focus solely on the substantive discussions of the episode.

Transcript

[David Brancaccio]

A new economic agenda takes shape in Washington as we get into day two. I'm David Brancaccio. President Trump is set to meet with Republican congressional leaders today to try to map out his legislative agenda. The President issued wide ranging series of executive orders soon after taking office, many connected to his economic agenda. Marketplace's Nova Safo has more.

[Nova Safo]

For all of the talk of what was to come on day one of the second Trump term, what actually came of it was rather muted, at least as far as he economic policy is concerned.

[Mark Goldwine]

We heard there's going to be tariffs on day one. I didn't see tariff policy.

[Nova Safo]

Mark Goldwine is senior vice president and senior policy director of the Committee for a Responsible Federal Budget, a nonpartisan think tank. Trump did float the idea of potentially imposing 25% tariffs on Mexico and Canada by February 1st. He said nothing about more tariffs on Chinese imports and on lowering consumer prices.

[Mark Goldwine]

He directed all the agencies to start having prices front of mind. That's a reasonable ask. Does it solve inflation? Does it even reduce inflation? No.

[Nova Safo]

Trump also ordered a pause in spending money from the Bipartisan Inflation Reduction Act. That law funds clean energy projects across the country, including in many Republican congressional districts. So it's unclear how long that pause will last. He also said he's halting the TikTok ban, but it's an open legal question whether he can. What Trump can do is directly influence the activities of the executive branch. And to that end, he ordered all federal workers back to their offices and froze hiring. A lot of other stated goals to roll back Biden error policies will have to go through the time consuming federal rulemaking process. I'm Nova Safo for Marketplace.

[David Brancaccio]

In early stock trading in this new presidential administration, the dow is up 0.8%, 340 points. Now the S&P is up 6.10of a percent. The NASDAQ up 3.10%. The VIX index of stock market volatility is flat stable. Beyond that, let's consult Jeffrey Cleveland, chief economist at the investment firm Payton and Regal, based in Los Angeles. Hello there.

[Jeffrey Cleveland]

Good morning, David.

[David Brancaccio]

All right, there's stocks, but there's bonds. Yields have been coming down. Market interest rates, in other words, have been coming down for a couple of days. Some of it is politics, we'll get to that. But some of it right is what we know about consumer inflation.

[Jeffrey Cleveland]

Yeah. Last week we did see core cpi. So the consumer price index, excluding the more volatile food and energy components, it registered a bit softer of a reading than expected for the month of December. So I think this was good news. We also heard from an important Fed official saying that, you know, if inflation continues to behave, it continues to cool off as the year progresses, we still could see more interest rate cuts from the central bank. And so I think those two issues, softer CPI and possibility of cuts, was welcomed by the bond market. Bond yields fell as a result.

[David Brancaccio]

All right. Also, we do have a new president, but one of the themes from yesterday is that all the promises of the campaign can't be done on day one. And I guess the bond market's paying attention.

[Jeffrey Cleveland]

There just isn't enough time when you have to make multiple speeches and zigzag across Washington, D.C. so I think the key is bond investors feared policy changes that could be implemented immediately, say tariff hikes or immigration restrictions, and that those policy changes would induce inflation and boost bond yields. But if there is some delay, you know, even of days, weeks or months in implementing some of these policy changes, that could bring calm to the bond market.

[David Brancaccio]

DAVID all right, but the day is young here, Jeffrey. Jeffrey Cleveland, Chief Economist Payton and Riegel, thank you very much.

[Jeffrey Cleveland]

Have a great week.

[David Brancaccio]

Crude oil is down two and a quarter percent now just above $76 a barrel. Workers at the warehouse style chain store Costco have voted to authorize a strike by the end of this month if there is no contract by then. The union says 85% of members said yes to a strike yesterday. Costco management has yet to Foreign.

[Emily]

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[David Brancaccio]

The operator of the Texas power grid has issued a weather warning. With snow and cold, high electricity demand and for what ERCOT called the potential for lower backup reserves. Texans will remember the 2021 deep freeze and the widespread outages that followed. Now generators and microgrids are on the rise. And for low and middle income Texans, a new lending program helps people gird for climate change powered extreme weather. Marketplace's Elizabeth Troval reports.

[Elizabeth Troval]

In its first year, the program by the Clean Energy Fund of Texas hit $1 million in low interest loans for home projects like solar.

[Mark Goldwine]

Obviously it's batteries. There are H Vac systems more energy efficient heat pumps, insulation.

[Elizabeth Troval]

That's clean Energy Fund of Texas CEO Billy Briscoe, who says projects reduce energy demand and protect homes if the power goes out.

[Mark Goldwine]

This is as much about resiliency as.

[David Brancaccio]

It is about renewable energy.

[Elizabeth Troval]

The Texas program is in partnership with the Solar and Energy Loan Fund, a nonprofit that is ramping up its lending across the Southeast. Says CEO Duan Andrade, Texas is like the Gold star proof of concept. They are demonstrating that if we facilitate a mechanism to deploy this capital efficiently at low cost, then we can serve low and moderate income communities with a low cost product. Their Green Home Loans program has seven partners with twice as many in the pipeline. I'm Elizabeth Troval for Marketplace.

[David Brancaccio]

Donald Trump won by a landslide in the Electoral College. He also won the popular vote, but by just under 50%. That means we continue to live in a divided country. We have an ongoing series here about unusual jobs. Today, a guy who argues his job combats polarization.

[Mark Goldwine]

My name is Tane Danger. I'm a professional improviser and host. We started the Theater of Public Policy, but I didn't actually have a degree in public policy, which I kept saying, like, oh, if I'm going to run a show called the Theater of Public Policy, I should probably know something about public policy. So I applied for a Bush fellowship and that allowed me to go back to school to get my master's of public policy from the Humphrey School of Public affairs at the University of Minnesota. The Humphrey School came back to me and said that they wanted to work on this existential, I will say, challenge in our society of how do we help people have dialogue across differences. We created a training that used best practices from communication theory, had some improv exercises in it to help get people in that collaborative, we're going to figure this out together mindset and then woven like, how do we use that in a policy or civic conversation? Some people came in a little bit apprehensive, but by the end they were sitting down and having open conversations with each other on topics ranging from reproductive rights to gun rights to LGBTQ issues to income inequality, almost anything that you can imagine. And they were being able to both share their own story and values and listen and ask each other questions about why they believe those different things. And so now we're working with the Humphrey School on like, can we bring this unique training out further? I'm really interested in can we bring this to folks outside of an academic setting? I think that a training on how to have better conversations with people who see things differently than you do is something that 350 million Americans, like, could benefit from. We think that people should participate in civic programs or conversations about politics or policy because it's the right thing to do. It is your civic obligation to be informed about X, Y or Z. I'm a public policy person. Like, I agree. And I always say, like, how's that working out for you? Like, if it's just sort of a sense of obligation to do it, like, we kind of know the limits of that. And so if instead you can create something where people are like, oh, I actually really want to be part of that conversation. I actually really want to go and learn about this thing because it seems like it might be kind of fun and there's other cool, interesting people who are there that I want to be with that seems like it's a much better way forward that has the potential to bring a lot more people into learning and understanding issues together, but also understanding each other in a whole other kind of way.

[David Brancaccio]

Do you have an odd job? Odd as in unusual or a strange in a good way occupation you want to know more about? Email us using morning [e-mail] More in our series we call it what's that Like Is on [e-mail] I'm David Brancaccio with our morning report from APM, American Public Media.

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