Is the economy red, orange, yellow or green?

Summary

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Podcast Summary: The Indicator from Planet Money

Episode: "Is the economy red, orange, yellow or green?"

Date: April 6, 2026
Host: NPR
Guests:

• Austan Goolsbee, President, Federal Reserve Bank of Chicago
• Beth Hammack, President, Federal Reserve Bank of Cleveland

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Episode Overview

This episode takes a playful yet insightful approach to understanding the current state of the US economy by checking in with two Federal Reserve regional bank presidents. Using a "traffic light" color system—red, orange, yellow, or green—the host prompts the guests to assess inflation, employment, and financial system stability in plain language. The discussion provides a rare, behind-the-scenes look at how top Fed officials interpret complicated economic signals and manage regional rivalries, delivering candid perspectives on today's economic paradoxes.

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Key Discussion Points & Insights

1. The Economic Paradox

The context and setup for the color-coded discussion.

• [00:11] The US economy currently shows mixed signals:
  • Unemployment is low, yet people feel it’s a bad time for job hunting.
  • The stock market dipped in response to global conflicts but remains higher than a year ago.
  • Public sentiment is gloomy, despite rising labor productivity.

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2. Meet the “Data Dogs”

Friendly rivalry and personal backgrounds shape perspectives.

• [00:59] Austan Goolsbee (Chicago Fed):
  • "I always said I don't aspire to be a bird of any kind. I just wanted to be one of the data dogs."
• [01:05] Beth Hammack (Cleveland Fed):
  • Shares the same "data dog" approach.
  • Light-hearted banter about personal style and regional differences sets a relaxed, candid tone:
    • [01:23] “Does Austan need to fix his hair. Is his hair okay?” (Beth Hammack poking fun at bald Goolsbee.)

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3. Inflation: “Orange with a Chance of Meatballs”

Assessing price stability—the Fed’s primary goal at 2% inflation.

• [03:47] – [04:42]
  • Beth Hammack: “I would say orange on prices.”
    • Inflation has hovered around 3% for nearly five years, making only minimal progress recently.
    • “It’s definitely at the brighter, the more vibrant color. Orange. I don’t know if that’s burnt orange. Burnt sienna. My Crayola box is a little bit old.”
  • Austan Goolsbee: “Yeah, at least orange...Orange with the chance of meatballs.”
    • Rising gas prices, continued tariffs, and new “stagflationary” shocks are pushing inflation closer to “red”:
    • “We started last year with a series of what I kept calling it stagflationary dust thrown in the air...I was optimistic...but yikes, it’s going from orange to red.”
  • [05:41] Concerns include fresh oil shocks and persistent elevated prices.

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4. Employment: “Chartreuse” with Pockets of Strength

The labor market’s unusual mix of stability and stalling.

• [05:44] – [07:15]
  • Austan Goolsbee: “Yellow. It’s an unusual environment...The hiring rate is as low as it’s been in years. But layoff rate is extremely low. It’s just a low churn, low hiring, low firing labor market, which is extremely unusual.”
    • Attributed this to ongoing economic uncertainty—businesses are hesitant to hire but also holding on to current workers.
  • Beth Hammack: “Yeah, I would agree. I think we’re in that yellow, green kind of area.”
    • Playful color banter:
      • Host: “Maybe a chartreuse?”
      • Hammack: “Chartreuse is a good color for it...Actually, you know what, it’s like the Diet Mountain Dew the President Bark, drinks. That’s exactly the color.”
    • Unemployment rate sits near what Hammack sees as “maximum employment.”
    • For her district (Ohio, Kentucky, Pennsylvania, and West Virginia), difficulty finding skilled and manufacturing workers is more common than not.

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5. Financial Stability: “Forest Green” but with a Watchful Eye

Assessments of systemic health and market frothiness.

• [08:01] – [10:14]
  • Beth Hammack:
    • “I would say we’re generally green right now from a financial stability perspective. There are definitely pockets that I’m watching. Private credit is certainly one of them. But on the whole...I feel good about the state of the banking system.”
    • Tighter financial conditions may hurt some businesses but are not a systemic threat at present.
  • Austan Goolsbee:
    • Splits his answer into two:
      • Payments System (“Plumbing”): “On that green, solid green, forest green, Amazon green, that’s very stable.”
      • Market Valuations: More anxious, gives a “yellow” due to “frothiness” in asset prices:
        • “It does look like there is a lot of frothiness there...I don’t know if that’s bubble or if it’s rooted in actual productivity improvements that have come from AI or other technologies.”
        • Cautions about repeated cycles of asset bubbles: “They can end in tears.”
  • Memorable moment: Host jokes, “So forest green for the plumbing and what color for that more general financial sector?”
    • Goolsbee: “Maybe that’s yellow. I don’t know. You’re never going to hear me say the words chartreuse.”

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Notable Quotes & Memorable Moments

• Austan Goolsbee:

  • “I always said I don’t aspire to be a bird of any kind. I just wanted to be one of the data dogs.” [00:59]
  • “Orange with the chance of meatballs.” [04:07]
  • “I was optimistic that we would get back to this path to 2% inflation. But yikes, it’s going from orange to red.” [04:42]
  • “We got some weird people in our, in our world.” [07:12]
  • “On that green, solid green, forest green, Amazon green, that’s very stable.” [08:41]
  • “You’re never going to hear me say the words chartreuse.” [10:08]

• Beth Hammack:

  • “My Crayola box is a little bit old.” [04:16]
  • “Chartreuse is a good color for it...Actually, you know what, it’s like the Diet Mountain Dew the President Bark, drinks. That’s exactly the color.” [07:06]
  • “I would say we’re generally green right now from a financial stability perspective.” [08:12]

• Host:

  • “Well, this has been a full spectrum of economic insights.” [10:14]

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Timestamps for Key Segments

• 00:11 — Introduction: Today's Economic Paradox
• 00:59 — Meet the Guests: Fed Presidents as “Data Dogs”
• 03:47–05:43 — Inflation Assessment
• 05:44–07:15 — Employment Assessment
• 08:01–10:14 — Financial Stability Assessment and Wrap-Up

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Summary Table: Fed Presidents' "Traffic Light" Ratings

| Economic Factor | Beth Hammack (Cleveland) | Austan Goolsbee (Chicago) | |----------------------|-------------------------|------------------------------------| | Inflation | Orange ("Burnt Orange") | Orange, trending towards Red | | Employment | Yellow-Green (Chartreuse/Diet Mtn. Dew) | Yellow ("No chartreuse!") | | Financial Stability | Green | Green/Forest Green (plumbing); Yellow for valuations |

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Final Takeaway

This fast-paced, good-humored conversation captures the complexities and ambiguities in today’s economy—persistent inflation (orange), an unusual but stable jobs market (chartreuse/yellow), and overall financial system health (green), but with watchfulness for emerging risks (yellow). The episode features candid moments that humanize central banking and encourage listeners to look beyond headlines and embrace nuance.

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Transcript

[NPR Announcer]

Npr.

[Host]

The US Economy is a little paradoxical at the moment. Unemployment is relatively low and yet people are saying it's a terrible time to find a job. The share market slumped in the first month of the war in Iran and yet still talks are still way higher than a year ago. Americans are feeling glum about the economy and yet labor productivity is up.

[Narrator/Host]

It's times like this when it's helpful to get multiple perspectives, like how about two presidents of the Federal Reserve banking system? Regular listeners will know that there are 12 regional Fed banks around the country. And Austan Goolsbee leads the Chicago Fed. Austan comes from academia and says he doesn't have a bias for higher or lower interest rates, that he's neither a hawk nor, nor a dove.

[Austan Goolsbee]

I always said I don't aspire to be a bird of any kind. I just wanted to be one of the data dogs.

[Host]

Beth Amic says she's also a data dog. She used to work on Wall street and now is the president of the Cleveland Fed, which covers Ohio and parts of Kentucky, Pennsylvania and West Virginia. And Cleveland has a bit of a rivalry with Chicago that was apparent right as we were getting the mic set up.

[Beth Hammock]

Does also need to fix his hair. Is his hair okay?

[Narrator/Host]

Austin is bald.

[Austan Goolsbee]

If you didn't know, that was a kind of low blow. Now I have no mercy. I was going to have mercy on Cleveland and now there's going to be none.

[Host]

And it was tensions between the academic Austan Goolsbee and the markets oriented Beth Hammack that we were keen to hear more about.

[Narrator/Host]

So today on the show, taking the Temperature of the Economy, the latest on prices, unemployment and the stability of the entire financial system. After the break,

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[Host]

Beth Hammack, president of the Federal Reserve bank of Cleveland, and Austan Goolsbee, president of the Federal Reserve bank of Chicago, welcome to the show.

[Austan Goolsbee]

Yay. Thank you for having us.

[Beth Hammock]

Thanks for having us.

[Host]

So it's not every day that we get not just one, but two Fed bank presidents to talk with. So I wanted to play a game. I'm going to bring up the three main parts of the economy. The Fed looks at inflation, jobs, and the financial system. And I'd like your assessment of what the outlook is. Red, orange, yellow or green? Red. The house is on fire. Through to green, meaning everything's looking swell. Are you ready?

[Beth Hammock]

Yes, I'm ready to go.

[Host]

All right, let's begin with prices. The Fed's goal is to have inflation at 2% a year. What colour are we at with inflation? So just the colour first, starting with. Beth. Red, orange, yellow or green?

[Beth Hammock]

I would say orange on prices.

[Narrator/Host]

Okay.

[Host]

And Austin?

[Austan Goolsbee]

Yeah, at least orange.

[Beth Hammock]

Burnt orange.

[Austan Goolsbee]

Orange with the chance of meatballs. You know, it has me. Gray.

[Host]

I. Okay. Both in the orange range. Beth, can you talk about your rationale for that color?

[Beth Hammock]

Yeah. Inflation has been above our target for coming on five years. We've been trading closer to 3% than our objective of 2%. We made good progress by 2024, but for the past two years, it's been basically moving sideways. And so part of my assessment, and I'd agree with Austin, that it's definitely at the. The brighter, the more vibrant color. Orange. I don't know if that's burnt orange. Burnt sienna. My Crayola box is a little bit old.

[Host]

And, Austin, what's your rationale?

[Austan Goolsbee]

I mean, just get in your car and look out the window. The price of gas here in Chicago. And that summarizes what everybody already knows, which is prices are up and they're not happy about it. We've been going the wrong way. And we started last year with a series of what I kept calling it stagflationary dust thrown in the air, where stagflation is where both sides of what the Fed's supposed to be doing start getting worse. At the same time, the prices start going up faster than 2%. At the same time, the job market's deteriorating. And I was optimistic that we would get back to this path to 2% inflation. But yikes, it's going from orange to red. Lately we had tariffs increasing prices. That was supposed to go away, kind of didn't go away. And now we're at another stagflationary shock

[Host]

on top of it with the oil shock right now.

[Austan Goolsbee]

Yeah, that's a troubling moment.

[Host]

I'd like to turn to the second of the Fed's dual mandate jobs. The Fed tries to keep unemployment low, also known as full employment. And I'll let you go first, Austan. What mood would your employment mood ring be right now?

[Austan Goolsbee]

Yellow. I, I'd say yellow. And it's an unusual environment in the job market because there are some measures that the job market looks bad, objectively bad. The hiring rate is as low as it's been in years. But there are other measures that look fairly benign. Like the layoff rate is extremely low. It's just a low churn, low hiring, low firing labor market, which is extremely unusual. I think the thing that explains that is uncertainty, periods of uncertainty, you tend to see businesses stop hiring, but also not let go of the people that they, that they have. And we've had a lot of uncertainty, but it's mostly stable.

[Host]

And Beth, what's your color and why?

[Beth Hammock]

Yeah, I would agree. I think we're in that yellow, green kind of area.

[Host]

Maybe a chartreuse.

[Beth Hammock]

Chartreuse is a good color for it. Yeah, it's a good word for it. I'll go with chartreuse.

[Austan Goolsbee]

I'm done with this conversation. We don't wait, Chicago Fed, we don't have chartreuse.

[Beth Hammock]

Actually, you know what, it's like the Diet Mountain Dew, the President Bark and drinks. That's exactly the color.

[Austan Goolsbee]

It is. We got some weird people in our, in our world.

[Beth Hammock]

To me, the best indicator is really the unemployment rate because with all the changes that we've had in immigration, it's hard to know what job creation should be to keep things steady. And the unemployment rate that I see right now is right around my estimates of maximum employment. I think we're just in that zip code and so we'll see how that continues to play through. It is a fragile type of balance in that it is this low hiring, low firing environment. As the mother of two college age kids, I definitely am hearing about how it's been difficult for new entrants into the workforce and, but it does feel like there are still opportunities, there are still places. And you know, I'd say for my district, the fourth district, what I hear more often when I'm out talking to employers is that they have a hard time finding the workers they need, particularly in places like the skilled trades or manufacturing.

[Host]

The other big sector of the economy the Fed takes a big share of responsibility for is financial stability. Beth Hammock, what colour would you give for your assessment of the US Economy's financial stability?

[Beth Hammock]

I would say we're generally green right now. From a financial stability perspective, there are definitely pockets that I'm watching. Private credit is certainly one of them. But on the whole, I feel good about the state of the banking system. Market seems to be moving very well. Over the past month, you've seen financial conditions tighten a bit. That may be a little bit tricky for businesses as both interest rates have gone higher, equity prices have gone lower. But in general, I think from a financial stability perspective, I think the economy is in a good place.

[Austan Goolsbee]

And Austan, I would split it in two ways. You said the financial system, and there is a part of the financial system that in our language is about payments and the plumbing of the financial system. And the Federal Reserve System literally runs $5 trillion of payments per day over its rails. Wire transfers, direct deposit, stuff like that. On that green, solid green, forest green, Amazon green, that's very stable. I'm a little more anxious. Something about valuations.

[Host]

And when you say valuations, you're meaning companies. Valuations in the stock market, prices of things like gold, for example.

[Austan Goolsbee]

Yeah, if you look at prices compared to earnings and things like that, it does look like there is a lot of frothiness there that has happened. And I don't know if that's bubble or if it's rooted in actual productivity improvements that have come from AI or other technologies. But having lived through a few of those cycles, the kind of asset bubble driven boom bust, they can end in tears.

[Host]

Got it. So forest screen for the plumbing and what color for that more general financial sector?

[Austan Goolsbee]

Maybe that's yellow. I don't know. You're never going to hear me say the words are true.

[Host]

Well, this has been a full spectrum of economic insights. Thank you for joining Austan Goolsby and Beth Havoc.

[Beth Hammock]

Thanks for having us.

[Austan Goolsbee]

Yeah, really our pleasure.

[Host]

This episode was produced by Corey Bridges and engineered by Kwesi Lee. It was fact checked by Vito Emanuel. Kate Concannon edits the show and the indicator is a production of npr.

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