The Indicators of this year and next

Summary

Planet Money: The Indicators of This Year and Next Hosted by NPR's Planet Money | Release Date: December 25, 2024

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Episode Overview

In this festive episode of Planet Money, the hosts engage in a spirited competition to determine the "Indicator of the Year" for 2024 and share their predictions for 2025. Through engaging discussions, insightful analysis, and a touch of holiday humor, the episode delves into significant economic indicators that have shaped the past year and will influence the next.

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Indicator of 2024: The Competition

1. Adrian Ma: Consumer Sentiment ([06:18])

Adrian Ma opens the competition by advocating for Consumer Sentiment as the primary indicator of 2024. He explains how this metric serves as an emotional barometer of American optimism or pessimism regarding the economy.

“Consumer sentiment isn't just a reflection of the economy. It was a political catalyst that's shaped the world we're currently living in now.”
— Adrian Ma [06:18]

Key Points:

• Historical Context: Pre-pandemic consumer sentiment hovered around an index of 100. Over the past year, it has declined to the 70s, reflecting ongoing dissatisfaction despite low unemployment rates and rising wages.
• Political Implications: The dip in consumer sentiment influenced voter behavior, contributing to political shifts, including support for Donald Trump's return to office.
• Diverging Views: Recent data shows Republicans exhibiting increased optimism post-election, while Democrats display the opposite trend, highlighting the politicization of economic perceptions.

2. Kenny Malone: Bitcoin ([08:02])

Kenny Malone presents Bitcoin as his indicator for 2024, highlighting its price surge from $42,000 to over $100,000 as a reflection of broader economic sentiments.

“Bitcoin is an indicator of the year because its very existence, its modern value, is a very 2024 Rorschach test for how people feel about the world's institutions and where they are headed.”
— Kenny Malone [08:02]

Key Points:

• Price Volatility: The significant increase in Bitcoin's value mirrors growing distrust in traditional institutions and increasing economic uncertainty.
• Institutional Trust: The rise suggests a paradox where investors place trust in crypto-friendly policies of incoming administrations, reflecting shifting trust dynamics.
• Economic Indicator: As a decentralized currency, Bitcoin serves as a barometer for public sentiment towards financial institutions and regulatory environments.

3. Jeff Guo: The Beveridge Curve ([11:15])

Jeff Guo introduces the Beveridge Curve as his chosen indicator, explaining its relevance in understanding the relationship between unemployment rates and job openings.

“The Beveridge curve seemed kind of broken. And that is a good thing, because it means that the Fed has been able to tame inflation without inflicting a lot of painful unemployment on everybody.”
— Jeff Guo [11:15]

Key Points:

• Definition: The Beveridge Curve illustrates the inverse relationship between job vacancies and unemployment rates.
• 2024 Anomaly: Despite a reduction in job openings, unemployment rates did not increase as expected, indicating effective Federal Reserve policies in controlling inflation without significant job loss.
• Economic Implications: This "broken" curve signifies a soft landing for the economy, where inflation is managed without triggering high unemployment.

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Listener Engagement: Voting for 2024 Indicator

The hosts invite listeners to participate by voting for their favorite indicator of 2024. Voting can be done via email at [e-mail] or through Planet Money's Instagram @planetmoney, encouraging audience interaction and engagement.

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Predictions for 2025: Future Indicators

Looking ahead, the hosts each present their forecasts for the most impactful economic indicators in 2025.

1. Adrian Ma: Inflation Expectations ([16:27])

Adrian predicts Inflation Expectations will be pivotal in 2025, emphasizing its role in shaping consumer behavior and economic policy.

“If consumers believe that inflation will increase in coming months, they'll be more likely to want to spend their money now before it loses value.”
— Adrian Ma [16:27]

Key Points:

• Survey Metrics: Indicators from the Federal Reserve Bank of New York and the University of Michigan gauge public expectations on future price levels.
• Behavioral Impact: Rising inflation expectations can lead to increased consumer spending, potentially fueling actual inflation.
• Policy Concerns: With a new administration under Donald Trump proposing tariffs and other economic measures, inflation expectations are crucial in forecasting potential economic shifts.

2. Jeff Guo: R Star ([18:35])

Jeff introduces R Star (the natural interest rate) as his top prediction, describing it as the equilibrium interest rate that neither stimulates nor restrains the economy.

“R Star is basically everything. And right now we are at this weird inflection point, I feel like, for the whole world.”
— Jeff Guo [18:35]

Key Points:

• Definition: R Star represents the ideal federal funds rate that balances economic growth without triggering inflation.
• Current Debate: Post-pandemic economic uncertainties have led to differing opinions on R Star's appropriate level, ranging from 1-2% to as high as 4%.
• Economic Indicators: Understanding R Star is essential for predicting Federal Reserve policies and their impact on the broader economy.

3. Kenny Malone: Global Trade ([21:50])

Kenny forecasts Global Trade (or its decline) as the key indicator for 2025, focusing on the effects of potential tariff implementations.

“Global trade is what we should be watching next year. We are nearly 100 years post Smoot-Hawley... how gigantic will the tariffs be? All of that will matter quite a bit.”
— Kenny Malone [22:10]

Key Points:

• Tariff Implications: Following historical precedents like the Smoot-Hawley Tariff, the introduction of significant tariffs could drastically reduce global trade volumes.
• Economic Connectivity: In an increasingly interconnected world, fluctuations in global trade have profound impacts on international relations and domestic economies.
• Political Factors: Anticipated tariffs from the Trump administration could reshape trade dynamics, influencing everything from manufacturing to consumer prices.

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Concluding Remarks

The episode wraps up with the hosts reflecting on their discussions, emphasizing the importance of understanding economic indicators to grasp the broader economic landscape. They encourage listeners to stay informed and engaged with Planet Money for continued insights.

“They were engineered by Gilly Moon and Neil T. Valto. Kate Concannon edits the Indicator. I'm Kenny Malone. This is NPR. Thanks for listening.”
— Kenny Malone [24:50]

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Notable Quotes

• Adrian Ma on Consumer Sentiment:
  “Consumer sentiment isn't just a reflection of the economy. It was a political catalyst that's shaped the world we're currently living in now.”
  — Adrian Ma [06:18]

• Kenny Malone on Bitcoin as an Indicator:
  “Bitcoin is an indicator of the year because its very existence, its modern value, is a very 2024 Rorschach test for how people feel about the world's institutions and where they are headed.”
  — Kenny Malone [08:02]

• Jeff Guo on the Beveridge Curve:
  “The Beveridge curve seemed kind of broken. And that is a good thing, because it means that the Fed has been able to tame inflation without inflicting a lot of painful unemployment on everybody.”
  — Jeff Guo [11:15]

• Adrian Ma on Inflation Expectations:
  “If consumers believe that inflation will increase in coming months, they'll be more likely to want to spend their money now before it loses value.”
  — Adrian Ma [16:27]

• Jeff Guo on R Star:
  “R Star is basically everything. And right now we are at this weird inflection point, I feel like, for the whole world.”
  — Jeff Guo [18:35]

• Kenny Malone on Global Trade:
  “Global trade is what we should be watching next year. We are nearly 100 years post Smoot-Hawley... how gigantic will the tariffs be? All of that will matter quite a bit.”
  — Kenny Malone [22:10]

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Conclusion

This episode of Planet Money offers a comprehensive look at the economic indicators that defined 2024 and provides insightful predictions for 2025. Through thoughtful analysis and engaging dialogue, listeners gain a deeper understanding of the complex forces shaping the economy and, by extension, the world.

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For more insights and detailed discussions, subscribe to Planet Money+ for sponsor-free episodes, bonus content, and more.

Transcript

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Diageo, New York, New York hey, it's Amanda Aronczyk. The year is almost over. You've heard a lot of pitches asking you to support npr. To the many of you who have given, thank you. Now, if you are sick of these pitches, chances are you are a heavy podcast listener that you get a lot out of NPR podcasts like Planet Money, the Indicator, up first, the NPR Politics Podcast. In order to make all our shows possible, NPR has sponsors sponsors slot messages into podcast episodes. You hear them every show. Unless you don't. That is just one of the things we offer. Supporters who sign up for NPR sponsor free episodes of more than 25 different NPR podcasts, including this one. And those sponsor messages add up. If you listen to two or three NPR podcasts each week, we could be talking about 12 hours worth of sponsor messages in a year. So just consider like what is 12 hours of your time worth and imagine spending that on something that matters and keeping those 12 hours. Supporting public media is a public good, especially right now. Information matters. Facts matter, context and perspective matter. We know you know this. So please take a few minutes. To save hours of time in the coming year and support NPR, go to plus.NPR.org get sponsor free episodes as well as bonus episodes, merch discounts and other perks across more than 25 NPR shows. That's plus.npr.org the link is in our episode notes too. And thanks.

[Kenny Malone]

This is Planet Money from npr.

[Adrian Ma]

Hey, it's Adrian Ma from the Indicator Podcast. And it's that time of the year when we.

[Kenny Malone]

This is a weird request. Are we able to run a crackling fire under this whole intro? Is that possible? Oh, I'm Kenny Malone from Planet Money.

[Adrian Ma]

Ah, yes, I can feel the warmth right now.

[Kenny Malone]

Jeff, come on in. Come around the fire. Come on in. Come on.

[Jeff Guo]

Thanks. Thanks guys. It's getting kind of cold out there.

[Kenny Malone]

There's Jeffrey Guo. Jeff Guo, great. Great to have you here. It's so cozy in here.

[Adrian Ma]

Love it.

[Jeff Guo]

Love a combustion event.

[Adrian Ma]

It's that time of the year where we gather with friends. Or as we do on the Indicator, where we gather with our Planet Money family and and do what families do best around the holiday season. Engage in brutal soul breaking arguments. Yes, in a fashion most public.

[Kenny Malone]

There's nothing like it. It's so, so warm and friendly. It's time for Family Feud. That's right.

[Adrian Ma]

Ba ba ba ba ba ba ba ba. Okay, so today we have a head to head to head competition between me, Kenny and Jeff for indicator of the year. And then in part two, we've got our best predictions for indicator of 2025.

[Kenny Malone]

You know, one thing I do wonder, every year we do this, the the sort of timer buzzer is offensively loud and maybe an OSHA violation. Can we get that checked ahead of time this year?

[Adrian Ma]

Oh, if anything, I think we're going to. We're going to turn up the volume on the buzzer. Okay, well, the time limits must be strictly observed. Just to recap the rules, each of us will make a spiel, an argument for why our indicator is the indicator of the year. And we'll only have 60 seconds or less to do it or else we die.

[Kenny Malone]

A that is too loud. Come on.

[Adrian Ma]

And in the end, you, dear listener, will vote on who had the indicator of 2024. Coming up on the show, we've got.

[Kenny Malone]

An indicator going to the moon.

[Jeff Guo]

I have got a nice cold beverage. Hint, hint.

[Adrian Ma]

And I'll be talking about our consumer feelings. That's all after the break.

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[Kenny Malone]

All right, it's Family Feud where we lovingly quarrel over what was the indicator of the year that Just passed and, and where we try to predict what will be the indicator of the year to come. But, but let us, let us first begin with 2024. And how this works is we're going to have 60 seconds on the clock. Each of us is going to have a chance to make our case for the indicator that best captured the year 2024. Are you each ready? Have you brought notes? Have you brought, I don't know, speedy read throughs? What do you got?

[Adrian Ma]

I got it all up here, Adrian.

[Kenny Malone]

Why don't you then, Mr. Memory, take it first 60 seconds on the clock and go.

[Adrian Ma]

Nothing captures 2024 quite like my indicator of the year. Consumer sentiment. America's emotional barometer for how optimistic or pessimistic consumers are feeling about the economy. Now, in pre pandemic times, the University of Michigan's consumer sentiment index was hovering around 100, meaning people felt okay about the economy. But for the past year it's been down around the 70s. And this one indicator explains so much of what we saw this past year. It shows how people still felt the pain of inflation. It explains why people felt lousy about the economy despite low unemployment and rising wages. And it explains why a lot of voters wanted to ditch the Democrats and bring Donald Trump back into office. The latest consumer sentiment numbers even show how Republicans felt a surge of optimism about the economy right after the election, while Democrats felt the opposite. In short, consumer sentiment isn't just a reflection of the economy. It was a political catalyst that's shaped the world we're currently living in now. Boom.

[Kenny Malone]

Look, I'm not here to rag on other people's indicators, but I will say in last year's Family Feud, I won indicator of the year with consumer sentiment for 2023. So it doesn't devalue you doing it now. It doesn't. It doesn't mean that you are repeating it and uncreative. It doesn't mean any of those things.

[Adrian Ma]

I, you know, I just, sometimes I. The sequel is better than the original.

[Kenny Malone]

Sometimes.

[Adrian Ma]

That's a good argument. Just like Godfather 2 was better than Godfather 1.

[Kenny Malone]

Uh huh.

[Jeff Guo]

Or Toy Story 2.

[Adrian Ma]

I guess they do. They just called it the Godfather.

[Kenny Malone]

All right, all right. Fair.

[Adrian Ma]

Okay. Let's see if you could do better. Kenny.

[Kenny Malone]

Yeah.

[Adrian Ma]

What's your indicator of the year?

[Kenny Malone]

All right. Ready? Put it on the clock. Are we ready? Someone give me the go.

[Adrian Ma]

Okay. Three, two, one.

[Kenny Malone]

Hodl. Diamond hands. My indicator of the year is the. The price of Bitcoin. One Bitcoin at the start of the year costs around $42,000. It is now above 100. Bitcoin was created in the wake of the 2008 financial crisis. Distrust of institutions is baked into its very existence. And yet today, it's true that maybe some people are buying this because they see uncertainty on the horizon, more distrust of institutions. But what seems to be more prominent in an explanation is the spike is that people assume the incoming administration is going to be very friendly to crypto, which ironically, is, I guess, a kind of trust. Crypto trust in incoming institutions. Either way, I think bitcoin is an indicator of the year because its very existence, its modern value, is a very 2024 Rorschach test for how people feel about the world's institutions and where they are headed. Thank you very much. I rest my case.

[Jeff Guo]

Okay, Bitcoin.

[Kenny Malone]

Can I ask. I'll be honest. Did that make any sense? I don't want to sound unconvinced in my own argument, but what do you think?

[Adrian Ma]

I think you gave it away at the end there when you said that bitcoin is a indicator of the year.

[Kenny Malone]

Oh, no. Did I say that?

[Adrian Ma]

The indicator of the year?

[Jeff Guo]

So Kenny's subconscious thwarting him again.

[Kenny Malone]

No retakes. No retakes. Look, I currently do have the belt for winning the feud, and I. If it has to go to somebody else, be because I said any indicator, that's okay.

[Jeff Guo]

The way I would think about it, the way I would challenge our listeners to think about it is when in 40, 50 years. I don't know. When you're telling your grandchildren, man, 2024 was about blank. Are they going to say 2024 was about Bitcoin?

[Kenny Malone]

They might. They might. They'll be like, we used to have a thing called fiat currency. And they're like that. There was something other than bitcoin, Grandpa. And we'll be like, yes, yes, yes, my darling Hodel. That'll be her name. But not because of bitcoin, because I love. Just because I love Fiddler on the Roof. That's all. No, you guys, really, neither of you. Come on. That's such a good joke. I wish Waylon were here. She would get that.

[Jeff Guo]

Oh, my God.

[Kenny Malone]

Well, I don't feel great about that effort. I'm going to be honest. But that's okay. Jeff guo, let's put 60 seconds on the clock.

[Jeff Guo]

Actually, guys, before we get started, actually, a little parched. So just. Just give me. Give me one second. Like, I'm serious.

[Kenny Malone]

I actually.

[Jeff Guo]

I just need to get something real quick. Hold on.

[Kenny Malone]

Where is Jeff what is Jeff doing? Didn't we say. Didn't we send no bits? No bits, no shenanigans.

[Jeff Guo]

No one said that.

[Kenny Malone]

Jeff has literally wandered off camera. His camera. Are you. He's making us wait. I haven't. We have passed my heart out for this recording when I must go pick up my children, and yet Jeff must go get a can of soda for. For whatever he's about to do. Disrespectful.

[Adrian Ma]

I am very confused right now.

[Kenny Malone]

Okay, I'm back.

[Jeff Guo]

I'm back, I'm back, I'm back. My apologies to Kenny's children. They are wonderful.

[Kenny Malone]

So you can pay the daycare fee when we're late.

[Jeff Guo]

Okay, so now with my ice cold beverage in hand, I can tell you about my indicator of the year, which is the beverage curve, which, to be fair, has nothing actually to do with beverages at all.

[Kenny Malone]

No, it has nothing to do with beverages.

[Jeff Guo]

It's not even spelled the same. But anyway. Someone want to start the clock?

[Kenny Malone]

Yes. That is what we were waiting for. Wonderful. A pun. I was thirsty. Three, two, one, go.

[Adrian Ma]

Ah.

[Jeff Guo]

Okay, so the Beveridge curve, which is named after the economist William Beveridge, is the name that economists have for the relationship between the rate of unemployment and the rate of job openings. So, for instance, usually when job openings go down, it's harder to find jobs and unemployment goes up. Up. But. But this past year, as the Fed was pumping the brakes on the economy, something weird was happening. Companies were posting fewer and fewer job openings, but unemployment wasn't really going up that much. In other words, the beverage curve seemed kind of broken. And that is a good thing, because it means that the Fed has been able to tame inflation without inflicting a lot of painful unemployment on everybody. It's almost as if a lot of those disappearing job openings were just like, you know, just like, you know, the froth on top of a carbonated beverage. Get it? Get it. Okay. Anyway, to me, that is the big story of 2024. The broken beverage curve that helped us get to the soft landing. The soft landing. We got.

[Kenny Malone]

Your time's over. Your time's over.

[Jeff Guo]

Well, we almost got to the soft landing.

[Kenny Malone]

After all of that buildup, we have half a mind to have only given you 45 seconds. Anyway, you're lucky you got the full minute, Jeff Guo. Now that we've gotten the feud out of the way, everybody, let's go ahead. Let the old fire up again. We can be cozy together and be friends, because that really is what the holiday is about. It's about fighting briefly and coming back together and then dorking.

[Jeff Guo]

I'm sitting in front of a chemical reaction.

[Kenny Malone]

Yes.

[Jeff Guo]

Yes.

[Kenny Malone]

It's a beautiful, beautiful thing.

[Adrian Ma]

Yes.

[Kenny Malone]

All right, listen, we've made our cases for indicator of the year. Now it is your turn to vote. Listen, listeners, you can email us@indicator p r.org that's indicatorpr.org or you can also check out posts on Planet Money's Instagram @planetmoney and leave your choice in the comments there. Coming up after the break, we're gonna make our cases for the future. What will be the next indicator of the year for the year 2025? And while we go into the break, Jeff. What? Want to throw another log on the fire? It's just getting.

[Jeff Guo]

Oh, yeah.

[Kenny Malone]

Whoa. Not that big, Jeff. Jeez.

[Jeff Guo]

You know, it's not that good to have indoor fires because of the CO2. It makes people drowsy and it also inhibits cognition.

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[Adrian Ma]

I think we've got pretty much all of 2024 indicators cleaned up and cleared out of the closet.

[Kenny Malone]

All the indicators gone. No crumbs. Is that what the kids say?

[Adrian Ma]

Gone, that is. Sure, let's go with that. There is one more mysteriously unmarked box here, though. Just if I can take this out here and let's see what's inside this thing anyway.

[Jeff Guo]

Adrian, is that.

[Kenny Malone]

Is that a glowing orb oh my God. I think we should touch it.

[Jeff Guo]

Sure, why not?

[Kenny Malone]

All at the same time. Ready? Let's take three, two, one, go. I feel like I can see it all. The future, the present.

[Jeff Guo]

I've been blessed with the knowledge.

[Kenny Malone]

Time is a flat circle.

[Adrian Ma]

Are you seeing it too?

[Kenny Malone]

Oh, yeah, I'm seeing it.

[Adrian Ma]

Indicators of the year ahead.

[Jeff Guo]

Oh my gosh.

[Kenny Malone]

Inflation expectations, the mythical our star, and.

[Jeff Guo]

Global trade, or the lack thereof.

[Kenny Malone]

Okay, so why don't we, why don't we start? Adrian, why don't you start?

[Adrian Ma]

My indicator to watch for 2025 is inflation expectations. This is an indicator that you can find in more than one place. Like the Federal Reserve bank of New York has one. The University of Michigan has their own version. And basically what they do is they conduct a survey of consumers and ask, where do you think prices will be one year from now or two or three years from now, etc.

[Kenny Malone]

Oh, ask the people. The wisdom of the crowds. This is good. Yes.

[Jeff Guo]

And Adrian, you trust the wisdom of the crowds is what you're saying?

[Adrian Ma]

Yes, of course, implicitly. No PhDs allowed in this space. Okay.

[Kenny Malone]

I don't know if that goes into the survey, but yes.

[Adrian Ma]

So the reason I think this is going to be an important indicator in general is that it gives us a hint about how consumers will behave in the future. Right. If, if consumers believe that inflation will increase in coming months, they'll be more likely to want to spend their money now before it loses value. But also, if these consumers are spending money like there's no tomorrow, that can actually contribute to inflation and make inflation a self fulfilling prophecy and at worst become an inflationary spiral. But I think that this indicator, inflation expectations, is going to be pretty important in 2025, because even though inflation has come down, we got President elect Donald Trump will be taking office soon and his economic proposals have a lot of economists worried about possibly a new round of inflation. Right. He's proposed tariffs, which as we've talked about on the show, could make foreign products more expensive. He's pledged to carry out mass deportations of unauthorized immigrants, which could be a double whammy for businesses that employ those immigrants. Right. Because if you think about industries like agriculture and construction, they could incur costs from losing employees who work for them and may have to raise wages to attract new workers. And all that could also contribute to rising prices.

[Kenny Malone]

All right, so inflation expectations, Adrian, that's pretty, Pretty good. Pretty good. Jeff Kuo, what is the, what does the glowing orb foretell in, in your eyes?

[Jeff Guo]

I think, you know, we can all agree that 2024 was a big year, Right. A pivotal year. The year the path of history took a turn. The US had an important presidential election. The Fed more or less declared victory on inflation. Taylor Swift wrapped up her world tour. So there is no doubt, right, that we live in a different world now. And the big question going into 2025 is just how much has that world changed? And that is why my indicator for 2025 is the indicator of all indicators. Our star.

[Kenny Malone]

Longtime Planet Money listeners may know that our star is something we are kind of obsessed with. It's an arguably a mythical number. Yes.

[Jeff Guo]

And so just to give, like, a brief explanation, you know how like, the Fed sets interest rates, right?

[Kenny Malone]

Yeah.

[Jeff Guo]

Interest rates are like a thermostat for the economy. Basically, if the economy's running too hot, the Fed will raise interest rates to try to cool it down. And if the economy is running too cold, then the Fed will lower interest rates to try to stimulate it. Well, R is supposed to be that ideal interest rate for the economy in the long term.

[Adrian Ma]

So it's like when you finally find the perfect temperature on the thermostat where your room is not too hot and not too cold.

[Jeff Guo]

Yeah. It's like a reflection of just your natural metabolism. And nobody actually knows what R STAR is for the economy. It's not something you can measure. It's more of something you predict. It's based on what you think the future economy will look like. Whether you think it'll run hot because of a lot of government spending or a lot of gains in productivity, or if you think it'll run cold because of, I don't know, aging populations or, you know, lack of opportunities for growth.

[Kenny Malone]

All right, so these are huge, important predictors of where the economy is going and sort of how, how much the engine should get revved up.

[Jeff Guo]

Yeah, yeah.

[Kenny Malone]

But why now? Why in the future? Why do you think it's important now?

[Jeff Guo]

Well, because something really interesting is happening to our star right now. You know, before the pandemic, a lot of people thought that our star was around like 1 to 2%. But after the, you know, chaos of the past year, the past couple years, really, people right now, they're really not sure what the future holds. They're arguing is our star maybe like 3%? Maybe it's going to go up to 4%.

[Kenny Malone]

And I suppose it depends to some extent on, on what you think about the long term consequences of, I don't know, AI and productivity unrest in the Middle east of, of various Trump presidency policies. Those kind of things.

[Jeff Guo]

That's a big one. Yes, yes. Our star is basically everything. And right now we are at this weird inflection point, I feel like, for the whole world. So in 2025, I think the big story is going to be what is our star?

[Adrian Ma]

And just like a thermostat, nobody can seem to agree on where it ought to be set.

[Jeff Guo]

68 degrees at all times.

[Kenny Malone]

Wow. Wow. Mr. Big Spender over here.

[Adrian Ma]

Okay, let us turn to Kenny.

[Kenny Malone]

Okay.

[Adrian Ma]

What is your indicator to watch this year?

[Kenny Malone]

Yes, it is my prediction, gentlemen, that 2025 will be the year of global trade, baby. Or lack of global trade. Depends.

[Jeff Guo]

Depends.

[Kenny Malone]

We're going to see because that is. That is my indicator of next year.

[Adrian Ma]

It's going to be global trade or the opposite.

[Kenny Malone]

Yeah, just stuff moving around the world. The rate of stuff move. You know, I know it does sound like an ambiguous, not real indicator, but. But in fact, the World Trade Organization reports world trade numbers regularly. And of course, at the heart of watching this next year is anyone? Anyone? Rhymes with san Serif. Tariffs. Tariffs. Yes. Tariffs of. Of unknown size is I guess my point here because President elect Donald Trump has floated at various times, like a lot of different potential tariffs. So there was at some time floated a baseline tariff of 20% on all imports, 25% on goods from Mexico and Canada, and as much as 60% on goods from China. Those are likely the extreme ends. We don't know for sure where the tariff numbers will land. And of course that has me thinking a lot about Anyone? Anyone? Rhymes with cute folly. Anyone? Mood.

[Adrian Ma]

Holly Smoot.

[Kenny Malone]

Holly. Of course, these are the infamously big and broad tariffs passed in 1930, which are then featured in a boring lecture in the movie Ferris Bueller's Day off where the teacher keeps saying, anyone? Anyone? Which is why I keep doing it. See what I was doing there, everybody? There you go.

[Jeff Guo]

I. Sweet.

[Kenny Malone]

But the thing is, following those enormous tariffs, global trade dropped by about 26%. It was a lot. And so for my money, now global trade is what we should be watching next year. We are nearly 100 years post smoot Hawley. The world is more globally connected than ever. And what happens when you drop gigantic tariffs into that world? And I guess how gigantic will the tariffs be? All of that will matter quite a bit. And I think it is worth watching next year.

[Adrian Ma]

Well, we have peered into the glowing orb and we have somehow survived with all our digits intact.

[Kenny Malone]

Speak for yourself.

[Adrian Ma]

Oh, no Candy. I'm sorry. I hope it was worth it.

[Kenny Malone]

Absolutely. Our pleasure. And next time I'm going to bring sunglasses. I gotta you gotta tell us ahead of time. There's going to be glowing anything.

[Jeff Guo]

Thanks for sharing the Curse of Knowledge with us.

[Adrian Ma]

I will share the Curse of Knowledge with you anytime.

[Kenny Malone]

These episodes of the Indicator were produced by Angel Carreras and Fact Checked by Sierra Juarez. They were engineered by Gilly Moon and Neil T. Valto. Kate Concannon edits the Indicator. I'm Kenny Malone. This is npr. Thanks for listening.

[Lagavulin]

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