Marketplace Podcast Episode Summary: "Maybe Next Year" Release Date: December 14, 2024

In this episode of Marketplace, host Kai Ryssdal delves into a range of pressing economic and business topics, providing listeners with in-depth analysis and expert insights. Covering themes from inflation trends to the revival of the Mississippi oyster industry, the episode offers a comprehensive overview of the current economic landscape and its future implications.

1. Economic Overview: Inflation and Interest Rates

Participants: Kai Ryssdal, Amara Mokway (Bloomberg), Anna Swanson (The New York Times)

The episode kicks off with a detailed discussion on the latest Consumer Price Index (CPI) report, which revealed a 2.7% increase—a figure higher than anticipated.

• Amara Mokway (02:07): "People said that report was kind of disappointing... investors think that it's a lock that the Fed will cut another 25 basis points at the meeting coming up this coming week."

Mokway explains the Federal Reserve's cautious stance, highlighting the potential for rate cuts and the uncertainty surrounding their future pace. Anna Swanson adds that while inflation has been downward-trending, its persistence may compel the Fed to reconsider rate adjustments.

• Anna Swanson (02:23): "The Fed will just want to proceed extremely cautiously... pretty good [economy], so just wait and see how that unfolds."

Kai introduces the concept of a "hawkish cut," prompting Mokway to clarify that it refers to the Fed potentially signaling a slower pace of rate cuts.

• Amara Mokway (03:48): "If inflation is continuing to be bumpy... do they really need to be cutting at consecutive meetings if that's what the scenario looks like now?"

The conversation underscores the Fed's delicate balance between curbing inflation and supporting economic growth, emphasizing the importance of forthcoming Fed communications and projections.

2. US-China Tech Relations and Policy Implications

Participant: Anna Swanson

Shifting focus to international relations, Anna Swanson explores the intricate dynamics between the United States and China, especially concerning technology transfers and trade policies.

• Anna Swanson (05:57): "China is at the same time our biggest military rival, but it's also a major trading partner. So where do you draw the line with that?"

She highlights recent tensions, such as China's ban on rare earth exports to the U.S. and investigations into American chipmakers, which add uncertainty to the already complex economic relationship. Swanson points out that potential deregulation, tax cuts, and tariffs could significantly influence the economic forecast for the upcoming year.

• Anna Swanson (07:06): "These are big unknowns that are being thrown at the Fed and at others as they're trying to predict the path of the economy next year."

3. Housing Market Forecast

Participant: Mitchell Hartman (National Association of Realtors)

The housing market takes center stage as the episode assesses its performance in 2024 and prospects for 2025.

• Kai Ryssdal (07:13): "It is not going to surprise anybody... 2024 has not been a banner year for the American housing market."

Despite high mortgage rates, home prices continue to rise, and new construction remains sluggish. Mitchell Hartman discusses optimistic projections from the National Association of Realtors, suggesting a potential slowdown in price increases and an improvement in housing inventory.

• Mitchell Hartman (08:26): "Price moderation... more homes on the market... inventory levels expected to improve as new construction picks up."

However, skepticism remains due to potential policy changes under the incoming Trump administration, including tariffs and deportations, which could dampen housing demand.

• Mitchell Hartman (09:01): "Tariffs are likely to push inflation and interest rates... higher mortgage rates and home prices will remain a barrier for folks trying to buy."

4. Corporate Diversity Regulations and Court Rulings

Participants: Kimberly Adams (Marketplace), Stephanie Creary (Wharton School), Devin Watkins (Competitive Enterprise Institute)

The episode explores the legal challenges surrounding corporate diversity initiatives, specifically a federal appeals court ruling against Nasdaq's proposed diversity rule.

• Amara Mokway (10:18): "The SEC originally greenlit Nasdaq's proposal with the goal of boosting diversity on the boards of the almost 3,000 companies on the exchange."

Opponents argue that the rule was discriminatory and overstepped regulatory bounds. Devin Watkins anticipates further legal setbacks for similar diversity mandates.

• Devin Watkins (11:19): "The SEC has recently been trying to use its powers to force companies to provide more information than companies normally provide to investors."

Conversely, Stephanie Creary emphasizes that businesses committed to diversity will continue to pursue these goals independently of regulatory requirements.

• Stephanie Creary (11:57): "They're creating opportunities for companies to be even more strategic... solving these issues and creating opportunities around DEI."

5. Geothermal Energy and Fracking

Participants: Kai Ryssdal, Kaylie Wells (Marketplace), Brandon Warner (International Energy Agency)

The discussion shifts to renewable energy, highlighting geothermal power's untapped potential and its synergy with hydraulic drilling technologies.

• Kai Ryssdal (16:20): "The first draws energy from the Earth's heat. The second became popular in the natural gas revolution... turns out that energy, just like politics, makes for strange bedfellows."

Kaylie Wells explains that adapting fracking techniques for geothermal energy extraction could significantly expand clean energy sources.

• Brent Warner (17:38): "Reaching geothermal heat is becoming more affordable in more places."

Despite environmental concerns, geothermal energy offers a non-intermittent power supply, addressing limitations inherent in wind and solar energy.

• Zainab Magavi (17:56): "Geothermal energy that's extracted doesn't get burned and release carbon... it's the non-intermittent energy supply."

The primary hurdles remain in adoption, permits, and investment.

6. Indian Health Service Medical Debt Issues

Participant: Katherine Houghton (KFF Health News), Amara Mokway

A poignant segment highlights the financial struggles faced by Native American communities due to billing issues with the Indian Health Service (IHS).

• Amara Mokway (19:35): "People in Native communities are twice as likely to have medical debt in collections as compared to the national average."

The narrative follows Holly, a member of the Gros Vent Tribe, who encountered erroneous medical debts when seeking care outside the IHS network.

• Holly (19:49): "I never received late notices, and more importantly, I didn't actually owe that money." (19:52)

The root cause lies in delays by IHS in processing payments for referred care, forcing providers to bill patients erroneously. Efforts to rectify the system are underway, but systemic issues persist, leading to financial hardships and damaged credit scores for tribal citizens.

• Frank White Clay (21:19): "Some of the most vulnerable people are being harassed daily by debt collectors."

7. Mississippi Oyster Industry Revival

Participants: Elon Ireland (Marketplace), Rick Buress (Mississippi Department of Marine Resources), Jessica Pruitt (University of Southern Mississippi)

The episode examines the precarious revival of Mississippi's oyster industry, which has struggled due to environmental disasters and regulatory bans.

• Elon Ireland (24:19): "It's sort of twilight zone-ish at this point because what used to be a hundred or more boats dredging is cut down to, believe it or not, two or three."

Following a devastating oil spill in 2019 that decimated oyster populations, restoration efforts have been ongoing. Recent reports indicate subtle improvements, with natural oyster larvae beginning to repopulate the reefs.

• Jessica Pruitt (25:34): "There's adult oysters somewhere that are producing larvae that are settling on the reef."

Chief Scientific Officer Rick Buress emphasizes the cautious approach to harvesting, aiming to support fishermen without jeopardizing reef recovery.

• Rick Buress (26:09): "This won't do any damage to the population, but give a little shot in the arm to some of our fishermen and some of our processors."

Despite low profits and high operational costs, local fishermen like Captain Bosarge remain committed to revitalizing the industry.

8. Draft Beer Tap Rankings

Participant: Kai Ryssdal

In a lighter segment, Kai reports on a shift in beer popularity, with Michelob Ultra overtaking Bud Light as the top draft beer.

• Kai Ryssdal (27:55): "Michelob Ultra has displaced Bud Light as the number one beer on draft in this economy."

This change reflects evolving consumer preferences in the beverage industry.

9. Final Notes and Additional Content

The episode concludes with brief updates on Wall Street performance, highlighting mixed results across major indices and specific company performances. Additionally, listeners are encouraged to explore related podcasts, such as Million Bazillion, which focuses on financial education for families.

This Marketplace episode offers a multifaceted exploration of current economic challenges and opportunities, blending expert analysis with real-world stories to provide listeners with a nuanced understanding of the factors shaping the near future.