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- [00:02]
David Brancaccio
Is the bond market part of the balance of power in Washington, I'm David Brancaccio in Los Angeles. With the President's party holding both houses of Congress with multiple allies at the Supreme Court, is it me being facetious or is there an argument that the bond market has become the remaining check on executive power in America? President Trump explained his dramatic turnaround on tariffs on Wednesday as a consequence of people, presumably investors, getting quote, yippee. That's a golf term, when nerves give you the yips on the fairway. Christopher Lowe, chief chief economist at FHN Financial in New York, has been watching those yippee signals from markets. Morning, Chris.
- [00:38]
Christopher Lowe
Good morning, David.
- [00:40]
David Brancaccio
So, I mean, among the signs of yippee behavior, bond yields falling even as stocks were falling in tandem, dollar falling. That was sending a signal.
- [00:51]
Christopher Lowe
It was. And we've seen it before. We saw it during the housing crisis, we saw it during the pandemic. Effectively, people have lost so much money in trades and they're probably levered, they're getting margin calls. We did hear that from British bank regulators. And so they start looking for ways to raise cash. And if you're forced to raise cash, you don't sell the thing that's down 80%. You sell the thing that's actually up in price that still has value. And so they started selling Treasuries and then stepping back.
- [01:29]
David Brancaccio
I mean, why were they so yippie financial market players? This is the sense that tariffs cut into profits, cut into consumption, could raise the risk of recession, right?
- [01:40]
Christopher Lowe
Well, yeah, absolutely. That's where it started. And there's no doubt, right? J.P. morgan, Goldman Sachs, all warning that global recession was likely given the level where those tariffs were set. And I think that's, that's really the most important element in this. We all knew we were getting global tariffs on April 2. No one expected them to be as high as they were. And as Howard Lutnick explained, the President decided it would give the US A negotiating advantage. And while that might make sense from a negotiating standpoint, it obviously had a devastating impact on financial markets.
- [02:23]
David Brancaccio
Yeah. And at the time prior to the turnaround on reciprocal tariffs, the President was making statements on social media saying that he's not paying much mind to the.
- [02:34]
Christopher Lowe
Market as long as it was an equity market sell off. I think that's probably right. But it's one of those things when you start to see particularly Treasuries selling off. Treasuries are the financial foundation of the entire global system. If treasury yields start rising, if treasury prices start falling, Too much. It absolutely disrupts the global economy. If it was possible to escape global recession, well, it's impossible if the treasury market melts down.
- [03:09]
David Brancaccio
Christopher Lowe, chief economist at FHN Financial, toward the end of an exhausting week, although we have one more trading day here. Chris, thank you.
- [03:17]
Christopher Lowe
Thank you, David.
- [03:18]
David Brancaccio
The stock is a way to own a piece of a company. A bond is a way to lend money to a company or a government in return for interest payments. Worldwide, there is more money in bonds than in stocks, and both have been volatile in the nine days since President Trump imposed new tariffs and suddenly rescinded some. Barry Ritholtz is chairman and chief investment officer at Ritholtz Wealth Management in New York.
- [03:40]
Barry Ritholtz
Arguably, what led to this massive reversal by the president wasn't the stock market sell off, it was the bond market sell off that got everybody's attention.
- [03:50]
David Brancaccio
At a time that the president's party controls both houses of Congress and has allies at the U.S. supreme Court. I've been saying that the bond market may be the only balance of presidential power these days. And the last week or so seems to lend credence to that crazy idea.
- [04:08]
Barry Ritholtz
You know, the bond market is reflective of so many things, including the threat from overseas investors that they're going to take their money home. And when you see a sell off in stocks and bonds together, that's a relatively rare thing. It's not just that people are selling US Assets they want to get out of the dollar. And that's a giant threat to our standard of living. The Pax Americana that has ruled economics, politics and military around the world since World War II. It very much caught people's attention today.
- [04:46]
David Brancaccio
The dollar did hit a three year low against the euro, which costs $1.14 at the moment. We also talked to Barry Ritholtz about how hard it is for people near retirement to be living through this turbulent stretch in markets. Marketplace Morning Report podcast has that conversation now. With the Trump administration confirming yesterday the China tariffs are now up at 145%. Beijing today raised its tariff on US goods to 120, but said they would ignore further counter moves by Washington should they come. With all this talk of international trade and new trade barriers, let's get a look at a product that you want fresh and as local as you can get. Part of our Odd Job series. Odd as in unusual. Let's meet William Skip Bennett, owner of Island Creek Oysters in Duxbury Bay, Massachusetts. What's that like?
- [05:57]
Skip Bennett
One of the challenges of being an oyster farmer is if you take A million seed out of the hatchery. They fit in your two hands and they weigh about two pounds. 18 months later, that will completely cover one acre and weighs about 200,000 pounds. So as that kind of crop grows, you have to be pre prepared to expand. My name is Skip Bennett. I'm the owner and founder of Island Creek Oysters. Growing up, I worked out on Duxbury Bay. My dad was a lobsterman, a fisherman. And by the time I was in high school, I was shellfishing to make money. I really loved the lifestyle. I really felt comfortable. You know, I felt at home on the bay. I love lobstering, but I knew that that wasn't what I wanted to do. And I get seasick, but I also don't swim very well, so probably being out in the ocean isn't a good idea. I like to be on the water. I don't like to be in the water. In 1990, I started messing around with growing some clam seed. I got wiped out by a parasite in 1995, so it was kind of a tough way to get into it. But after my clams died in 95, I was able to find some oyster seed from a hatchery up in Maine. I didn't even know if they'd grow out in the bay because there were no wild oysters. All the while I was shellfishing to sort of pay the bills. You know, when it first started to really work, it was kind of euphoric. It's not like all the problems were solved at once, but certainly the years when I, you know, got through the summer and had money in the bank and actually had my taxes from the year before paid, that was pretty exceptional. Especially after so many years of, you know, shellfishing, which. It's a tough way to make money and I suppose, yeah, once we started really making enough money to keep paying the bills, that was pretty, pretty euphoric. One oyster that we grow, it's called Aunt Dottie's. That oyster to me is really cool. It was my Aunt Dottie's house. She owned it in the 1940s, and she was just a great lady. And I was able to buy the house years later. And then years after that, I was able to permit a farm in front of the house. And it's out near the opening of the bay. So the water's really cold. It's very exposed. So, you know, those oysters get beat up all the time. They grow slow. But I think the flavor is incredible. You know, I think what kind of qualifies a really good oyster is sort of the complexity. So with those oysters, they're kind of medium brine. Then there's sort of a sweet, almost like crab meat flavor. You know, they're sort of seagrass flavors that end on a really sweet note. I love that oyster. I love the complexity of it. And to me, it was a real challenge to get it permitted. It was a challenge to figure out how to farm there in a way that was effective. So it's a real victory for me. I don't know of another protein that we raise or harvest that improves the quality of its environment. So through bioremediation, the removal of nitrogen, largely, oysters are doing a huge ecological service. On top of that, we're using the environment, the natural resources to actually make something that didn't exist. It's an important industry and there is a lot of benefit.
- [09:22]
David Brancaccio
Skip Bennett of Island Creek Oysters in Massachusetts, wrangler of the Bivalves have you worked a niche job or heard of an odd job that you want to learn more about? Pop us an email. It's morningreportketplace.org and analysts looking past the March wholesale inflation reading, which unexpectedly fell this morning with low crude prices at work. That data is the producer price index and comes from before the tariff shocks import taxes that can be inflationary. In Los Angeles, I'm David Brancaccio. It's the Marketplace morning Report from 8pm American Public Media.
- [10:09]
Jannelli Espinal
If there's one thing we know about social media, it's that misinformation is everywhere, especially when it comes to personal finance. Financially inclined From Marketplace is a podcast you can trust to help you get serious about your money so you can build a life you've always dreamed of. I'm the host, Jannelli Espinal, and each week I ask experts important money questions, like how to negotiate job offers, how to choose a college that you can afford, and how to talk about money with friends and family. Listen to financially inclined Wherever you get your podcasts.