Does the Fed now have a "dueling mandate"?

Summary

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Marketplace Morning Report

Episode Title: Does the Fed now have a "dueling mandate"?
Date: November 14, 2025
Host: David Brancaccio
Featured Guests:

• Nancy Marshall Genser, Marketplace
• Diane Swonk, Chief Economist, KPMG
• Michael Chui, Senior Fellow at Quantum Black AI by McKinsey

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Episode Overview

This episode explores major shifts in economic and business policy affecting the U.S., focusing on recent tariff negotiations, the Federal Reserve’s current dilemma amid unreliable economic data, and how businesses are using AI three years after the release of ChatGPT. Through expert interviews and news analysis, the episode unpacks the Fed’s increasingly complex “dueling mandate,” the practical impact of new trade frameworks, and the real adoption of AI in industry.

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Key Discussion Points and Insights

1. New U.S. Tariff Frameworks with Central and South American Countries

(Begins at 00:43)

• Four Countries Involved: El Salvador, Argentina, Ecuador, Guatemala.

• Changes Outlined: U.S. to remove reciprocal tariffs on products not sufficiently available domestically, notably coffee and bananas.

• Tariff Details: Despite reductions, a flat 10% tariff remains on most goods from Argentina, Guatemala, and El Salvador, and 15% on products from Ecuador.

• Retail Impact: Price drops possible if retailers pass savings to consumers, but no new U.S. access to more Argentinian beef due to domestic rancher resistance.

  “The Trump administration says it'll remove reciprocal tariffs from certain products from these countries that can't be grown, mined or naturally produced in the US in sufficient quantities... But the US would apparently still charge a flat 10% tariff on most imports from Argentina, Guatemala and El Salvador and a 15% duty on products from Ecuador.”
  — Nancy Marshall Genser [01:08]

• Other Trade Provisions:

  • No digital services tax on data (Meta, Google)
  • Stricter IP protection standards

• Implementation Timeline: No deadline; aims for signature in “coming weeks”.

  “There is no deadline. The White House just says they'll work to get the framework agreement signed in the coming weeks.”
  — Nancy Marshall Genser [02:33]

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2. The Fed’s “Dueling Mandate” and Economic Uncertainty

(Begins at 02:41)

• Data Delays: Economic indicators delayed/distorted by government shutdown, leading to gaps in knowledge about job market and inflation trends.

• Fed’s Predicament:

  • Labor market weakening and inflation climbing simultaneously.
  • Incomplete data ahead of the Dec. 10th Fed meeting means potential decision delays on interest rates.

• Expert Analysis: Diane Swonk describes this as a “dueling mandate”, with the Fed caught between controlling inflation and addressing rising unemployment.

  “Instead of a dual mandate, they now have a dueling mandate where inflation and unemployment are both likely edging up, but they're not going to have the full picture of data before their December 10th meeting.”
  — Diane Swonk [03:06]

• Potential Policy Impact:

  • Possible Fed delay in cutting rates until January for more data, which may build political pressure but not significantly affect the economy in the very short term.

  “You know, waiting between December and January is really splitting hairs and doesn't mean much in terms of the overall economy... [but] it does mean something in terms of headlines and how political pressure will build.”
  — Diane Swonk [04:11]

• Stock Market Sentiment: Investors wary, especially regarding high tech stock valuations driven by the continuing AI boom. Wealth effects among affluent buyers are closely watched as a potential tipping point for wider economic consequences.

  “Anything to spook the affluent buyers that have been carrying the economy could mean much more dire consequences for the overall economy, and that would make it much more clear cut of where the Fed should go with regard to interest rates.”
  — Diane Swonk [04:51]

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3. Three Years into the AI Boom—How Are Companies Actually Using It?

(Begins at 07:16)

• Background: Marks three years since generative AI (e.g., ChatGPT) reshaped tech and business.

• Industry Adoption:

  • ~90% of surveyed companies use AI at some level.
  • Most (~66%) remain in experimental or pilot phases; only a minority have scaled AI across operations.

• High Performers:

  • “AI high performers” overhaul core business functions and workflows, rather than bolting on AI as an extra tool.
  • True transformation requires leadership commitment and vision.

  “There's a fundamental, qualitative, and quite frankly quantitative difference between doing [AI integration fully] and saying, look, these are the most important workflows in my business. Here's how I could use AI to completely rethink how they're done and then therefore get to impact.”
  — Michael Chui [08:32]

• Layoffs and Disruption:

  • Example: Amazon cutting 14,000 corporate jobs, possibly tied to AI efficiencies.
  • Concern over job losses and the importance of reskilling workers.

  “For anyone who experiences a job loss, it's important to realize as individual workers and then as corporate leaders, what can we do to reskill our workforce to help people to the next role?”
  — Michael Chui [10:04]

• Workforce Impact:

  • Raises question of “who benefits?” given some workers will earn more with AI-driven productivity, while others face disruption.

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4. Market Updates and Closing Notes

(Begins at 10:30)

• StubHub Stock:
  • Down 22% after company withholds quarterly guidance.
• Climate Crisis and Food Security (Teaser):
  • Next episode teased on climate-threatened crops and innovation in food systems.
  • “Imagine a future where chocolate and coffee are rare and expensive.” — Amy Scott [10:42]

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Notable Quotes and Memorable Moments

• On the Fed's dilemma:
  “Instead of a dual mandate, they now have a dueling mandate…”
  — Diane Swonk [03:06]
• On AI integration in business:
  "Nine out of 10 companies are using AI, [but] two thirds...haven't gotten beyond the experimenting and piloting phases to actually scaling it."
  — Michael Chui [08:32]
• On labor market and inflation data:
  "They're not going to have the full picture of data before their December 10th meeting."
  — Diane Swonk [03:06]
• On market sensitivity:
  "Anything to spook the affluent buyers that have been carrying the economy could mean much more dire consequences for the overall economy…"
  — Diane Swonk [04:51]

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Timestamps for Important Segments

• 00:43: Start of main news—Tariff agreements and implications
• 02:41: Discussion shifts to Federal Reserve and economic data uncertainty
• 03:06: Diane Swonk on the Fed’s “dueling mandate”
• 07:16: Anniversary of generative AI and its business impact
• 08:32: Michael Chui on the difference between piloting and scaling AI
• 10:04: The personal and workforce disruptions of AI-driven changes
• 10:30: StubHub stock drop and market wrap-up
• 10:42: Teaser for next episode on climate and food security

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Summary

This episode encapsulates the uncertainty and inflection points facing both policymakers and business leaders: the U.S. refines tariffs with key trade partners; the Federal Reserve grapples with conflicting mandates, incomplete data, and looming decisions on interest rates; and, on the third anniversary of generative AI, companies are challenged to move from experimentation to deep integration—creating both winners and deeply felt disruptions in the workforce. For listeners, the episode offers timely insight into how these major threads intersect and impact the broader economy.

Transcript

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[David Brancaccio]

Everyone talks about AI, but how are companies actually using it right now? I'm David Brancaccio in Los Angeles. First, in what could be an acknowledgment that tariffs make life more expensive than the Trump administration has announced first steps to lowering tariffs on four Central and South American countries. These are not deals, but outlines for deals. Marketplace's Nancy Marshall Genser joins us now. Nancy?

[Nancy Marshall Genser]

Well, these agreements are with El Salvador, Argentina, Ecuador and Guatemala. The Trump administration says it'll remove reciprocal tariffs from certain products from these countries that can't be grown, mined or naturally produced in the US in sufficient quantities. That appears to refer to things like coffee and bananas. But the US would apparently still charge a flat 10% tariff on most imports from Argentina, Guatemala and El salvador and a 15% duty on products from Ecuador.

[David Brancaccio]

So when a tariff goes down, do retail prices go down, for instance, at the supermarket?

[Nancy Marshall Genser]

Yeah. Yes, if retailers pass the savings from lower tariffs on to consumers. Also, David, there doesn't appear to be anything in the agreement with Argentina that would allow the US to import more beef, which could push down prices. President Trump did float that idea, but he got a lot of pushback from US Ranchers who said increased imports would undercut them.

[David Brancaccio]

All right, and beyond food, what do these new trade frameworks involve?

[Nancy Marshall Genser]

Yeah, all four countries have agreed not to impose digital services taxes, that is a tax on data from, say, Meta or Google. They also promised more protections on intellectual property rights, aligning them with international standards.

[David Brancaccio]

I mean, this is getting attention, Nancy, right here you and I are talking about this, but what is the time frame for lowering these tariffs?

[Nancy Marshall Genser]

Yeah, there is no deadline. The White House just says they'll work to get the framework agreement signed in the coming weeks.

[David Brancaccio]

Okay, Nancy, thank you. There is a data deluge coming with economic indicators delayed by the government shutdown on the way starting next week Some of this will be distorted since normal surveys were not done at the normal times, which contributes to uncertainty about how, how much the job market is slowing and where prices are going at this time of tariffs. I spoke to Diane Swonk, the chief economist at KPMG today.

[Diane Swonk]

One of the things that you're seeing unfold at the Federal Reserve is this sort of deep debate, which is really, you know, on two sides of the equation. One is the labor market is weakening. We know that. We knew that going into the shutdown. But on top of it, we also knew as a shutdown occurred, we started to see inflation moving back up again. And that has really pitted the Fed at us sort of duel within itself. Instead of a dual mandate, they now have a dueling mandate where inflation and unemployment are both likely edging up, but they're not going to have the full picture of data before their December 10th meeting. And that's prompted many within the Fed to say, listen, maybe we should wait until January to decide whether to cut or not because we don't want to create a more sustained bout of inflation on the other side of it. We're worried about the labor market, too.

[David Brancaccio]

Well, you just got a lot of people's attention there, Diane, saying that one possible effect we'll see is what if the late data, the incompleteness of the data, means the Fed will wait a little longer before lowering rates?

[Diane Swonk]

You know, in the context of the lags of when interest rates affect the economy, you know, waiting between December and January is really splitting hairs and doesn't mean much in terms of the overall economy and how it performs. That doesn't mean. It doesn't mean something in terms of headlines and how political pressure will build if the Fed does not cut in December.

[David Brancaccio]

And, you know, central to your work is what's happening in the real economy to real people. But meanwhile, those other people in the stock market, they're in a bit of a snit here. They seem to be questioning whether or not these tech stocks should be priced this high.

[Diane Swonk]

And one of the things that's a concern is that much of the gains that we've seen have been carried in 2025 by the AI boom in terms of infrastructure, but also the wealth effects that accompany it. And that's something that we're watching very carefully because anything to spook the affluent buyers that have been carrying the economy could mean much more dire consequences for the overall economy, and that would make it much more clear cut of where the Fed should go with regard to interest rates. But until they actually know how people react to these changes, they're going to be in a bit of a bind.

[David Brancaccio]

Diane Swong, chief economist of the audit, tax and advisory firm KPMG.

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[David Brancaccio]

In a few days, it'll mark three years since generative AI in the form of ChatGPT changed the world. The AI boom has powered the stock market and made a lot of human beings feel in some cases more empowered and in other cases feel marginalized by machines. Three years on here, let's hear the data on what companies are actually doing with the technology. Michael Chui is a senior fellow at Quantum Black AI by McKinsey with a new study on this in hand. Michael, thank you for joining us.

[Michael Chui]

Ed, it's great to be with you.

[David Brancaccio]

Broad Brush when you strip away the big adjectives tacked onto bold claims about AI. How is the technology actually being used by businesses now?

[Michael Chui]

The use has broadened and continue to broaden. You know, almost 90% of all the companies that we surveyed are using it at some level, but the depth is the place where, you know there's There's a lot of variety, I would say, and the actual benefits of AI are seen in pockets. But rising to the surface in terms of, you know, entire organizations, that's where, you know, that's where we're seeing a.

[David Brancaccio]

Lot of opportunity sprinkling on a little AI into the operation. Like, maybe it's salt or ketchup, but you'd like to see companies weave it more deeply into how they think about their business.

[Michael Chui]

What we've actually seen is, you know, for instance, you know, while I said, you know, nine out of 10 companies are using AI, two thirds of those companies haven't gotten beyond the experimenting and piloting phases to actually scaling it. And then beyond that, we find the organizations that we describe as AI high performers are using AI to fundamentally change their business, to fundamentally rethink entire workflows, rather than, as you said, sprinkling it in. There's a fundamental, qualitative, and quite frankly quantitative difference between doing that and saying, look, these are the most important workflows in my business. Here's how I could use it AI to completely rethink how they're done and then therefore get to impact.

[David Brancaccio]

So the company is really taking the full plunge. I mean, how does it come about? It sounds like a full overhaul.

[Michael Chui]

Well, it is a full overhaul for some. For instance, you know, your operational effectiveness, you know, your manufacturing, your supply chain. That's the source of your competitive advantage. But the high performers differentially say, look, we're not just looking for cost reductions. We're looking for growth or we're looking for innovation. You know, it really takes some deep understanding and deep commitment by leaders in order to drive their organizations forward.

[David Brancaccio]

I mean, we see Amazon laying off 14,000 corporate positions. Some see AI at work in there. I know more productive people with AI technology will get paid more for far less drudgery. We can stipulate that. But Michael, the disruption is going to be very hard on people.

[Michael Chui]

It is hard. I mean, for anyone who experiences a job loss, it's important to realize as individual workers and then as corporate leaders, what can we do to reskill our workforce to help people to the next role?

[David Brancaccio]

Michael Chewy, Senior Fellow at Quantum Black AI by McKinsey the new report is called the State of AI in 2025. Thank you so much.

[Michael Chui]

Thanks, David. It's great to be here.

[David Brancaccio]

And stock in StubHub down 22% now after the ticketing company declined to offer normal guidance about the quarter ahead. It's Marketplace Morning report from APM American Public Media.

[Amy Scott]

Imagine a future where chocolate and coffee are rare and expensive, where cheap nutritional staples like corn and wheat are threatened. Sounds unpleasant, doesn't it? Well, we could be heading there if we don't recognize that the climate crisis is also a food crisis.

[David Brancaccio]

I've seen yields drop because of drought, and believe me, boy, have I seen them drop. We have had dry spells that have lasted years.

[Amy Scott]

I'm Amy Scott. This season on How We Survive. We investigate how the climate crisis is threatening our most vital food systems and how scientists are racing to develop alternatives that will shape the future of future food. Listen to this season of How We Survive on your favorite podcast. Apparently.