One of these days we will get through this show without using the word "uncer...
Today, however, is not that day.
“From American Public Media, this is Marketplace.”
In Los Angeles, I'm Kyle Rizdell. It is Tuesday today, the 21st of April.
It is always to have you along, everybody.
The on again, off again, on, off, on, off, on. Again, nature, a president Trump's war against Iran seems to be in an off phase. Late this afternoon, after the market is closed, interestingly enough. The president announced on his social media feed that he is extending the ceasefire that had been scheduled to end tomorrow.
There are some caveats and conditions, but the net effect does seem to be no more bombing for now. The market response tomorrow, TBD, if traders, aren't numb to the whole thing already.
“But as you know, whenever there is as much uncertainty in the air as there is now, investors”
pile money into the safest assets out there, among them, of course, the U.S. dollar.
The value of which jumped when the war started, and over the first month of it or so,
rose about 3%, since, though, the greenback has given up nearly all of those gains. Marketplace is Justin Ho has more on what's weighing on the dollar and what it might mean. The dollar's value rose early in the war, in large part, because the conflict has had an outsized impact on the rest of the world. "That's bad for the United States, it's just that it's worse for everybody else."
Can Rogoff, an economics professor at Harvard, says other countries are much more affected by energy shortages from the Middle East. As a result, investors poured more money into U.S. assets. "When money flows to the United States, it pushes the dollar up, when there seems to
“be peace again, some of the money reflows back in the other direction."”
Rogoff says that's partly why the dollar's value started to fall after the ceasefire started
a couple of weeks ago. But plenty of other things are dragging down the dollar's value, including the price of oil. "80% of oil transactions are conducted in U.S. dollars." That's one, Paris, director of trading at monarchs, USA.
Oil prices surged at the outset of the conflict, but in recent weeks, they fallen some. "So, naturally, with oil prices going down, they need for holding U.S. dollars or that necessity has faded away." There is also the President's approach to global trade. The dollar is perhaps a victim of the Trump administration's policies trying to extracate
the U.S. from its role in the global economy. That's Christopher Vekio, had a future as an FX at the research company Tasty Live. He says many investors have been shying away from the dollar, because of how the Trump administration has treated its allies. "Given how the Trump administration has conducted itself in the lead-up to this war, going
after European allies for Greenland, how it's conducted itself, during the war, chastizing NATO." Vekio says even if the war in Iran were to end, those other concerns aren't going away. I'm Justin Howe, for Marketplace.
Wall Street today down, though not a whole bunch tomorrow, as I said, "And the body's guess we will have the details when we do the numbers." There's one thing to keep in mind about the strong sales numbers in March, says Rik Miller of Big Chalk Analytics, "Retail spending numbers are how much money consumers spent on stuff, not how much stuff they got."
The more than 15% jump in spending at gas stations isn't because everyone splurged on a weekend road trip, still stripping out volatile spending on gas and car parts, retail sales still rose 0.6% from the month before. Jessica Ramirez of the Consumer Collective says some of that is thanks to Big Tax refunds, but people are also taking on more debt in order to keep spending.
"We've seen buying out the later, increase, we've seen credit card debt, increase." Taking on debt can mean consumers see better days ahead, but Matt Schultz of lending trees says there are some red flags. About 30% of buying out pay later users are using those loans for groceries.
That certainly doesn't seem like a sign of the healthiest consumer.
He says just two years ago, buying out pay later was more often used on discretionary items,
like handbags and gaming consoles. Perhaps the biggest reason people are still spending, though, is the labor market, says Craig Raleigh of Corn Fairy. "That unemployment still in the 4% category, which historically is not high."
“Raleigh says that's a number to watch if you want to know where consumer spending could”
go in the future. I'm Daniel Akerman for Marketplace. Justin told us about the dollar, Dan told us about consumers now, and industry that ties both of those pieces of this economy together. Banks, Lori Stewart is the CEO and President of Sound Community Bank in Seattle, Washington.
Lori, welcome back to the program. Well, it's a pleasure and an honor to be with you. Honor is ours. How are things at Sound Community Bank?
Here's the easy first question.
Well things at Sound Community Bank are good, you know, in this world we live in that has an awful lot of uncertainty. I would still say that our local bankers are doing well, and we're collecting deposits that make in loans and supporting our communities.
“Can one assume that if the banks are doing well, your clients are doing well?”
Well, I think that's true, but increasingly clients are talking to me about concerns of sustained high gas and grocery prices. And the thing we've also noticed, Kai, is that commercial borrowers who have approved loans are kind of sitting on their hands as opposed to coming to the closing table and using that hand as sign loan docs.
I wouldn't call it a big trend, but definitely a trend the last couple of weeks. Again, that signals to me uncertainty. Yeah, keep going with that, because it does seem to me that in the last couple of weeks, and we extrapolate that to eight weeks or so, and uncertainty has magnified, other than uncertainty, what do you make of it?
Well, I don't think it's over any, by any means, please not by any means. But I do think it's that kind of concern that says things are changing so fast. Should I just put this off for another week and see what happens? Right. And part of that's hope, too, right?
I hope that a week from now things will change. Yeah. Yeah, no, I like the hope, but that's good. Let me ask you to step out of your local community banking mindset and use your decades of experience in this industry at large.
I want to ask you a couple of sort of very big picture things. Okay. Private credit and the challenges that we're seeing in that space, you worried about that? Okay, I certainly have it on my list of things that merits watching. It's not keeping me up at night.
It's very opaque. Okay. Yeah, yeah. It's really hard to understand what the ramifications could be. So, it's on my list of things I probably read something about it if not every day, every
other day, and try and learn more. Yeah, you and me both. Speaking of learning more about something and also something being opaque, talk to me about what you're thinking about crypto and stablecoins and that whole new regime of money that seems to be common.
Well, let me talk about stablecoins because that's on the mind of every community banker if you'll indulge me for a minute. I think lots of us see business use cases for stablecoin and an accelerated payment system.
What's called it's all anxious is that basically our business is not super complicated.
We gather deposits and we learn them out. But if I can get some kind of reward that's like getting the rate on my money market account, I might be incentive to park those former bank deposits in stablecoin. And if we don't have deposits, we're not going to make any loans. So I think it's a little bit of a complicated issue, but I think we can solve it if we continue
work and together. stablecoin, I should have said a form of crypto that's tied to the dollar supposed to
“be stable on like most of the rest of crypto, so that's what we're going to do.”
Exactly. I look back in our files. Looks like it's about a year since we talked to you last, if that's casual holds, it's not that we've been ignoring him, but there's been a lot of news. If that's casual holds, we're going to talk to you in March or April of 2027.
What's the next year looking like for you and for your slice of this economy?
Well, again, if you'd ask me that question in February, compared to April, I would have had a much different answer.
“The year got off to a nice start, but with the conditions we're seeing and the hesitation”
on the parts of businesses and consumers, I don't think it'll be a bumpy year. There won't be as much growth as we anticipated. Then again, this two may pass and I might be saying something different. You're the expert. You're the expert.
We're going to go with what you say. Lori Stewart, she's a CEO also the president of Sound Community Bank Up in Seattle. Lori, thanks a lot.
Always good to talk to you.
Thanks, Guy. There are, depending on the sources you use, something like 2,000 ships and as many as 20,000 civilian mariners on those ships stuck in the Persian Gulf, they need, in no particular order if they are going to keep being stuck, food, fuel and water.
“If they're eventually going to get through the steroid of hormones, they are going”
to need it to open, yes, first of all. But they're also going to need insurance in the middle of a war. Marketplaces are pretty beneficial, it's on the things most of us didn't really think about until eight weeks ago, desk for us today. Ships can technically move without insurance, they just can't go anywhere.
They will not be accepted at any port.
Rahul Kapoor is vice president and global head of shipping and metals with S&P global
energy. Even things happen to ships like this carnival cruise ship that hit another carnival cruise ship in Mexico six years ago. No major injuries there. No port in its right mind would let a ship that doesn't have liability insurance pull
up, but ships also need to ensure themselves.
“What is called halen Masjiri, so that covers damage to the vessel itself, these are the”
two core insurance which a ship needs, small issue, none of them apply in a war. And this is typical of insurance policies, right? We have a range of things except this and war is excluded. Brandon Holmes is VP senior credit officer at Moody's ratings, so ships have to get war insurance, but one more small issue, the war insurance gets cancelled if there's a war,
not immediately, but like pretty fast. 72 hours, two to seven days, but we've heard of cases where it can be downloaded from 24, 48 hours. So there's this organization in London called the Joint War Committee, it's a bunch of insurance companies, and they decide when an area or region is suddenly high risk.
And when they decide that insurance companies can cancel and reprise their plans and the clock on those policies starts to run out. The intent there is that if a ship is caught up in an unforeseen war, it gives them some time to remove themselves from the situation and get to say that they be full that insurance is cancelled.
This system lets insurers offer cheap war insurance in case a war breaks out, but then once a war zone is war zoning, they can create special expensive insurance for if you want to go in there on purpose. Of course, in the Iran War, small issue, the ships can't just zip out of the way. They are literally stuck, so they need to get new much more expensive war insurance.
Bill and Saunders Mortimer is the UK War leader at Marsh Risk, an insurance broker and risk advisor. "Rates were around about 0.25% of the value of a ship to transit in and out of whole news prior to the events of the 28th February since then rates have increased to what we've observed as a limit of around about 10%.
That is an increase of almost 4,000%. But that was a maximum. He says rates have come down recently to just 2 to 6% of the value of a ship. Still high, and a contributing factor to oil prices, but the rates for a trip through her moves can fluctuate on a case-by-case basis, again, Brandon Holmes at Moody's.
"The insurers basically told us that the ship would need to be sort of pointed at the straight with its engines on and ready to go, and then they'd give them a price then. And then once that price is given, they'd have 48 hours to complete the transit."
Analysts say insurers are almost always willing to insure a tanker for the right price.
That is being tested right now for US and Israeli flagships that want to cross the straight. Dylan Saunders Mortimer with Marsh. "Under eyes, his struggle to price, where there is involvement from the United States, or Israel, on the basis that it almost removes the full chivety of the risk."
As then, Iran is almost definitely going to attack them outside of a ceasefire. The US is creating guarantees to back up insurers who would insure such ships, and let's
Say it's still being worked out, but it should help.
Rahul Kapoor with S&P Global warns not to get too caught up by the insurance side of things.
“"The state of almost is not seeing those transit because of insurance challenges, it's not”
seeing those transit because of the safety of the cruise safety of the cargo and the vessel." Insurance puts a price tag on risk. Insurance doesn't make that risk go away. In New York, I'm Sabri Beneshore from Marketplace. Coming up, I feel like our whole company should just shut down and focus on this for about
a month.
"I mean, that would be a gutsy move, but first, sure why not, let's do the numbers."
Now industrials down 293 today, 6th, and 1% closed at 49,149, and as DAX slipped 144.6 percent, 24,259, S&P 500 down 45 points, also a 6th, 7,064. Maritime insurance, you say? One of the biggest companies doing that chub limited to ticker symbol CB dipped to 10th percent.
Other insurers for your big boats, American International Group, AIG, maybe you heard of them flashback to the financial crisis? Anyone? Down 8/10 of 1% German Aliands lifted up 1% and 4/10 of 1% today. Bond down Yola on the 10-year T-note rose 4.30% Palestinian Marketplace.
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This is Marketplace, I'm Kai Rizdahl. Here's a news item to set up another news item which is going to set up a story about a sizable slice of a whole industry.
Lufthons of the German airline said today it's going to cancel 20,000 flights between
now and October. Most of them short haul in Europe because jet fuel has gotten so expensive. That's item 1. Item 2 is the low-cost American carriers where in Washington today, meeting with Secretary Transportation asking for help with, can you guess Marketplace has met the fields as that one?
In the weeks after the US and Israel attacked Iran, jet fuel prices almost doubled from about 250 a gallon to nearly $5. They've come down a little in the last couple of weeks, but are still high. This is like genuinely a big deal. David Slotnik at the points guy says it's an especially big deal for low-cost carriers.
Over these airlines typically are lower margin, they have a lot less wiggle room and fewer levers to pull when their costs go up. Bigger airlines can more easily raise ticket prices to offset some of these higher jet fuel costs. No way, Dan Ackens at Flight Path economics says budget airlines can't.
Simply because their passenger base is much more price-sensitive.
“That's why this group of low-cost airlines is asking the government for help in the form”
of tax relief. But Ackens says that ask raises a fundamental question. If airlines are going to get relief especially a category of airlines, why aren't all airlines getting relief? And if airlines get relief, why not other industries?
Trucking companies, taxi companies, Uber, they're all facing enormous increases in cost as well. So is there a call to subsidize all industries that are fuel-sensitive? Or consumers, at the same time, Slotkin at the points guy says this is an existential threat for low-cost airlines.
The argument they're trying to make to the government is that the price of fuel is on a Twitter putting them at a business. Them continuing to exist is good for the American consumer and the government's best interest. And that it's the government's war in Iran that has put them in this position. I'm Samantha Fields from Marketplace.
Artificial intelligence is moving fast. Every time you turn around, there is a new new thing. And in the last six months in particular, there have been big jumps in what are called agentic capabilities for AI. Those are programs that take a large language model out of the chat bots that were used
to, or you just ask it things.
You set it loose to actually do stuff in the world, like book a flight or del...
junk mail.
“Coding agents like Anthropics, Claude Code, or OpenAI's Codex, they focus on building”
software.
OpenClaw lets you run agents by messaging them from your phone.
They can work autonomously 24/7 on whatever tasks you give them. Really terrifying? Yes. And also, caveat M. Tour, as with most of generative AI, the results can be unpredictable. But still, you would think having an army of AI minions might free up some time, make
work more chill, as Marketplace is making McCarty Carina reports in Silicon Valley. Oh, you'd be thinking wrong. At a Menlo Park Starbucks down the road from all the big venture capital firms, John Wong hosts a meet-up for the AI agent curious. Welcome, join us.
Hello. Hey, grab a chair.
Wong is a tech industry veteran who runs his own startup investment network, and he
spent the last few months trying to automate as much busy work as he can. So I have right now eight bots running. So for example, in the morning at 6 a.m. it goes to Reddit. Looks at the top threads in the topics I'm interested in. And I told it, by 7 a.m. in my inbox, I want a report on the top news items I'm interested
in. Wong used to pay for a human assistant in the Philippines. Now he just pays for tokens. That's how AI usage is measured. I also asked it to write my resume for me today.
I said, here's my LinkedIn profile.
I need a professional looking resume.
The crowd of about a dozen showed up on this Wednesday night last month, entrepreneurs, big tech workers, and hobbyists, thinkers, Kevin State, runs sales strategy for an AI startup. I feel like our whole company should just shut down and focus on this for about a month. Right now, he's mostly using agents to organize his emails and write research reports. But he's working on building a custom networking assistant to track who he meets, map connections,
and prompt him to follow up. If I adopt this now, I probably have a three to four month run away before everyone else catches up. And so I want to be ahead of the curve to be more efficient. A sense that you're falling behind if you're not 10xing productivity, even while you sleep,
has taken over the industry, says Nicole Chotari, a venture capital investor in San Francisco.
“Everybody has this feeling of like, hey, time is the only thing that matters.”
And in that given unit of time, which we don't get back, how can I have AI do a lot more for me than the next person? He calls it token anxiety. People keeping tabs on their agents during parties, at bars, even while outside at the park.
I would see, like, laptops slightly open, like the warm glow of the light. Cotari himself is running agents for email, market research data analysis. His evening Netflix time has been replaced with Cloud Code, dreaming up new tasks to automate, just for fun. I have two young kids at home and a felt guilty, because I'd be like, oh, go to bad
quickly, so I can get back to my computer. And it's not just scrappy founder types. Some of the biggest companies in tech are reportedly token maxing, pushing employees to burn through as many AI credits as possible in an effort to turn out new features and products at an ever faster pace.
There is genuine excitement, but also fear, according to Eric Weber, who spent years leading data and AI teams, most recently at Grammarly. The change has happened so quickly.
“I think it's just orienting for people, because we're not used to job families getting disrupted”
in two or three months. AI is automating the very skills that tech workers spent their entire career's developing work. Weber says the industry is in a collective identity crisis. But I think what is causing a lot of stress for people is that doing more doesn't necessarily
create more leverage or impact, you're just doing more stuff. And so we don't spend a lot of time on the question, like, what should you actually be doing? To answer that question, Weber decided he needed to do less. He still uses agents, but about a month ago, he stepped back from his full-time executive role to spend more time thinking, writing, and talking to people.
I'm Megan McCarty Carino from Marketplace. As final note on the way out, the day Kevin Warsh had his confirmation hearing in front of the Senate Banking Committee today. There was the usual and expected raft of policy questions for President Trump's nominee
To chair the Federal Reserve.
Also, a whole lot of questions about how Warsh is thinking about the independence of the
central bank.
“On a very much related note, Warsh refused to answer a question about who won the 2020 election.”
Jordan Manji is a new Maharaj, Jenna Winn, Olga Oxman, and Virginia K. Smith are the digital team around here.
“I'm Kai Rizdall, we will see you tomorrow, everybody.”
This is APM. You may have learned recently, just how far a barrel of oil has to travel before it makes it into your gas tank.
“And a lot has to happen to that oil before it even becomes gas that you can actually”
use.
So this week on Million Vizillion, Ryan and I adventure on a road trip with stops in Texas
and Dubai to learn all about oil and why the price of gas goes up and down. And we even meet Derek, an oil drill who knows a lot about the global economy. OPEC is a group of oil producing countries that work together to decide how much oil they're going to drill and release for sale. They can drive the price down by releasing a lot of oil.
Listen to Million Vizillion on your favorite podcast app.
