[MUSIC]
>> Item number one, inflation. Did I say more? Item number two, Kevin, buddy, has the new job. Item three, you too, can write a Hollywood story? From American Public Media, this is Marketplace.
[MUSIC] >> In Los Angeles, I'm Kyle Rizdall. It is Friday.
Today, this one is the 15th of May good as it always is to have you along, everybody.
Let's talk about not a whole lot of time. So here we go. Stacey Vanix Smith is at Bloomberg, Katherine Rempel. Is at MS now also at the Bullwerke, are you too? >> Hey, Kai Kai.
>> Katherine Rempel, test my premise here.
“Need we say more about inflation, the CPI, and PPI this week way higher than anybody wanted?”
Yeah, definitely higher than anybody wanted higher than the Fed wanted, higher than consumers wanted, higher than businesses wanted, and my fear is that it very well may get higher as the higher energy costs reach into basically everything else that we buy, because energy goes into lots and lots of stuff out there, and is used of course to transport goods around the world.
>> Stacey Vanix Smith, new beyond the program in this role, welcome, it's always good to have you.
>> Yeah, Kai. >> Absolutely. How worried ought we be? >> I think we should be pretty worried. Obviously the big headline for this inflation report was oil fuel, the straight-of-pour
moves feels up to 28%, but there was a lot of other stuff in there. It wasn't just oil pushing everything up, food prices are up, shelter prices are up, and for the first time inflation is rising faster than wages, the first time this has happened in years.
“So that is, I think a really troubling sign that it's not just oil, causing prices to rise.”
>> Katherine, you and I spoke a number of weeks ago, I guess, about the bond market, and how so far the bond market has been giving the Trump administration especially, but also just sort of the general economy at large, kind of a pass, and here we have now 30 years selling this week for 5% and certainly things looking a little in the bond market. >> Yeah, a little dice here.
The last time that newly issued 30-year bonds sold at 5% or had interest rates of 5% was in 2007, so it's been a couple of decades at this point since we were back there. And that is troubling for a number of reasons. One, of course, is that the higher the borrowing costs are for the U.S. government, the more painful, the existing unsustainable debt levels we have will be.
We will also likely see higher interest rates for various kinds of financing products that consumers and businesses get, mortgages, car loans, credit cards, et cetera. That's all going to be painful, and then the real question is what does all of this mean for Mr. Kevin Worsh, who was recently confirmed as the Fed share, has promised to deliver lower interest rates, and the markets are signaling, no, we are not going to accept lower interest
rates. We do not expect lower interest rates. As have the other members of the FOMC of the Fed, the committee that votes on interest rates. So all of these things are, you know, not terribly surprising, but certainly put the incoming
Fed share in a very, very difficult position. Stacey is the newest member of our little Friday gang here.
You get the first whack of this question, and this one's always the toughest for a newbie.
“What is Kevin Worsh thinking in five words or less?”
The five words or less, I think, Kevin Worsh's thinking, I'm glad there are 12, because there are 12 members of the Federal Reserve who vote. It's not just him. And Kevin Worsh, I think a lot of times people forget this, but he only has one vote. In fact, Jerome Powell, who's just stepped down as chair today, has as many votes next week
as he did last week. So he has as much power now, and so Kevin Worsh, even if he does vote to cut interest rates and does to the Trump administration's line, it doesn't necessarily mean interest rates will move, because you've got to have a majority. So look, Catherine, as long as we're talking about Kevin, which obviously we're always
going to do, I suppose I should say chair Worsh, it is going to be a different Fed. It's just the machinations will be different. The public posture will be different. Some of the internal dynamics will be different.
Absolutely.
Yes, Kevin Worsh, among other things, when he went through this presumably grueling process to audition for the job and through his confirmation hearing, et cetera, talked about regime change, essentially, at the Fed, which is not just about interest rates, and it's not even just about the balance sheet, which is the thing that he probably cares more about, based on his public statements.
But he is also basically said that he doesn't think it's such a good idea for Fed officials
to issue forward guidance, which is the fancy way of saying signaling to markets what they think they're going to do.
“So I think there's going to be a lot of changes coming to how these meetings operate,”
to how they are communicated. I do wonder if we're going to continue having these month, not monthly, these regular press conferences with the Fed chair, which I don't know, I don't recall, you've correct me if I'm wrong. Well, if sure Worsh had indicated one way or the other way, whether you plan to cancel them.
But it wouldn't surprise me if he at least scales them back, given some of the things that he has said about how he thinks there's too much noise coming out of the Fed. He wants more, like, I don't know if he exactly put it this way, but he wants more, like knock down drag out fights with the Fed board removal, voicing their disagreement, which is different than how the Fed has been run for decades.
It has been more of a very consensus-based operation where the Fed chair, like it would have been unheard of to think of the Fed chair dissenting, right, from the rest of the other, the 11 other members who get to vote on interest rates. The last time that happened was 1939 that there was a Fed chair dissenting.
“So I think it's going to be a very different world.”
Stacey, 30 seconds, what do you think Worsh's first set of, say, meetings and consultations
are going to be? Is it going to go to the Hill and lay the political groundwork, is it going to go to the White House? What do you think? I think, I mean, the Catherine makes a really great point.
I think he, you know, he campaigned on wanting to change what the Fed does. I think his first order of business is going to have to be to kind of make some peace with the other Fed governors because he's, you know, really campaigned pretty powerfully that they had kind of messed up during COVID, that they were to blame for inflation and then the slow growth of the economy.
So now he has to go work with these people and get them to vote the way he wants them to vote.
So I think he's going to be first order of business, making some, mending some fences with
his fellow Fed governors. Yeah. Yeah, it's a really good point. Stacey Vanix Smith at Bloomberg, Catherine repel at the board, also I'm as now. Thanks you, too.
Thanks. Hi. Wall Street today, you know, sometimes reality does pierce that Wall Street bubble. We will have the details when we do the numbers. The chipmaker cerebrus went public yesterday and what you can fairly describe as a
blockbuster IPO. The initial public offering was priced at $185 a share that gained nearly 70% by the end of the day. And if you're thinking, boy, that's a lot. Allow me to remind you of the role artificial intelligence is playing in this economy right
now. The market dynamics of it specifically. cerebrus big AI chipmaker and one of several companies in the AI universe looking to tap into the capital markets this year, marketplaces definitely uses on it. cerebrus is known for this one particular kind of chip that's about the size of a dinner
plate. That's different from most chips which are tiny. An IDC analyst Nina Turner says this chip helps speed up the rate at which AI models can respond to questions. The models that are used to run AI basically run on these chips and allow the thinking
to occur faster. cerebrus's customers include open AI and Amazon web services and Turner says there is a definite market for the company's chips which is why investors have been scooping up its stock.
“There's really, I think a lot of investor appetite for companies with AI hardware, especially”
one that can potentially challenge Nvidia's place in the market. Which makes cerebrus kind of a get says Lehigh Finance Professor Donald Bowen. It's hard to invest in this space because there's a limited place to investor money which is why there's such enormous demand. Some investors are also worried there will be less demand for human labor in the future.
So Bowen says they're buying stock in the companies that make AI as a kind of hedge. So if you lose your job but you're invested in your company that's taking your jobs,
You still get the benefits of the economic activity that's generated.
The demand for cerebrus boads well for other big AI or AI adjacent companies is expected to go public in the next year. That includes anthropic, open AI and SpaceX which have eye-popping valuations. Jay Ritter directs the IPO initiative at the University of Florida.
“It's kind of unprecedented for important companies to have stayed private as long as”
they have before-tapping public capital markets. Ritter says a lot of these companies have been burning through their private investments. So now they're turning to the rest of us. That's definitely news from our news. Despite the rally in technology stocks, technology jobs just aren't keeping up with the hype.
Employment and information, that's kind of the government's proxy for technology, is off
11 percent since it's most recent peak back in 2022.
And with layoffs more abundant than might have been hoped, some of those former tech workers are having to find other kinds of employment like, say, self-employment. Here's today's installment of our series, "My Economy." My name is Joe Moore. I run vintage tone, guitar, amplifier repair in Denver, Colorado.
I started this business in 2025. I got laid off from my career in high tech after 27 years and told myself and pretty much everybody around me that I was going to take the rest of the year off and start looking for a job in high tech in January 2025, that was the plan. And as that time got closer and closer, I got grumpier and grumpier.
“And I just thought, is this really what I'm going to do with my career from now on?”
My wife asked me, "Well, what do you actually want to do? What do you really want to do for the next 20 years or so?" And I said, "I want to fix guitar amplifiers, which had been my hobby for going on 10 years at this point. I started going around to the local guitar shops here in the Denver Metro area.
As soon as I said the phrase, "I'm an amp-tech," the owner of the story said, "Thank God." People call us multiple times a week. They started referring people to me immediately. Within about three months, I had a four-week backlog of work.
As silly as it might sound, when I'm doing a servicing, I'm quite literally counting all the controls, all the knobs, all the vacuum tubes that are built into it. So if something comes to me that only has one knob, then I might price that at $100. But if somebody brings me something that has 25 knobs and 12 vacuum tubes, then I'm going to price that three four times more than that, because it's quite literally three or four times
more work for me. I guess a big milestone was a year after opening, I paid myself for the first time. So I'm able to contribute to the household, I'm able to pay bills, not just my business bills, but my home bills as well. And that is very validating.
There are definitely days where I'm staring at some an amplifier that looks like a bold full of spaghetti, which just wires going everywhere, and I have no idea where anything is
going, and I have this feeling of I'm never going to be able to figure this out.
But eventually I do, and it's such a thrill, it just re-agnited that that feeling of joy and discovery, again, that I hadn't felt in my professional career in a while. That was pretty good, right, Joe Moore owns a vintage-toned guitar amplifier repair and Denver, whether you have just started your second career or your kick it off your first one.
“Tell us about what's happening in your economy, would you?”
Marketplace.org/mycon So these are high-profile Hollywood deals.
Sometimes shorter really is better, but first, let's do the numbers.
Yeah, the wall was down, Duster was plunged, 537 points, 1 and a 10%, 49,526 ...
as Dacca raised 410 points, 1 and a 1/2% 26,225, that's a new version of the wall, isn't
good.
“S&P 500 down 92 points, 1 and a quarter percent, 74 and 8, I'm sure somebody's going to”
tell me. For the week, the Dow is down 2/10%, and as Dacca fell just under 1/10, the 1% S&P 500 added a 10, but 1% bond prices fell, the yield on the 10-year tino, this is what we were talking about at the top, mean Katherine, 10-year now at 4.60%, you're listening to Marketplace. This is Marketplace, I'm Kaya Rizdell.
Given what we've seen this week, consumer and wholesale inflation spiking, while at the same time retail sales holding up pretty well, what is playing out in the beer and wine cooler at your local convenience store?
Might perhaps not be surprising, specifically not as many alcoholic beverages are being sold.
Beer wine and liquor down 5.4% year over year in April, that's a quarter of the Nielsen IQ. The NBC reports the trend actually got a little worse in early May. That's the shot Marketplace of Mitchell Hartman has the chaser. With the caveat that beer sales can be volatile month to month, the impact it by weather
“and when holidays fall in addition to inflation, the downtrend lately isn't surprising”
to beverage analyst Mike Bronstein and Alex Partners. Beer in general has been in structural decline, down year over year for the last several years, truck that up to more health-conscious consumers a new alternative stealing market share, like hard sellsters and cocktails and a can. But Bronstein says soaring gas prices aren't helping.
Fuel pricing is really exacerbating trends already in motion.
First consumers are prioritizing everyday necessities over discretionary purchases, says
Johnny Sawyer at public opinion firm Ipsos. So he says. Beer sales are down the most at convenience stores where the most beer is sold. Traditionally, you've got a driver who steps out of their car to pump gas, steps inside if they've got a minute, those cases full of cold beer or so inviting.
But right now, for cash strapped consumers, says Chip West at Marketing firm RRD.
“Beer is a impulse purchase, when you're outside at the pump, a lot of times you won't”
even walk into the store because you're still concentrating on how much am I spending on gas. And it's not just beer sales that are suffering. So they're seeing a decrease in snacks, soda, lottery tickets. Whatever happens with gas prices, the beer industry does have some costs for optimism says analyst Bercard Nesson at Robo Bank, because in June, FIFA is coming to town.
The world cup is just going to be a really big deal because it's the playbook they know how to to run, right? They know how to sell beer at big events. And he calls this one a Super Bowl that lasts some month. I'm Mitchell Hartman for Marketplace.
You've perhaps heard that Hollywood in the entertainment industry more broadly has been struggling. In the last month or so about Disney and Sony have announced layoffs and studios are over all making fewer movies and shows than they were even just a couple of years ago. So when I read about a boom lid of sorts in the world of entertainment, I'll be at a very
specific one. My interest was peaked. And 30th letter, he though, is a senior reporter for LA material where she wrote about Hollywood and the publishing world's new found interest in short stories. Welcome to the program.
It's good to have you on. Thanks for having me. Tell me about this. I guess it's a subreddit or a form or something and read it. It's no sleep.
What is that? Yeah. So no sleep is a subreddit where people can post horror short stories and they have to be written in first person. And it started as this forum, but it's like spun out way beyond read it.
There is a podcast where these stories are read out loud, people fall asleep, which is ironic given the name of the subreddit to listening to the stories on readout loud on YouTube. You can even go see some of the no sleep creators on a crime wave cruise next February. So it's this very popular thread with horror stories that has this cult following. And now it seems it's sort of Hollywood movie feeding ground.
Tell me how this happened. Yeah. So in 2020, this producer named Scott Glass Gold was perusing the page looking at the
Short stories and he sold a story that he found called My Wife and I bought a...
a million dollars to Netflix and also sold a book steal for that same story.
So I'm confused actually because I thought the way Hollywood worked is you did a spec script or you made a pitch and then you got accepted it and now you're telling me that
“all you have to do is write this thing on read it and maybe you can get a movie deal.”
I don't think it's quite that simple, but yeah, I mean the traditional Hollywood model is either you do this pitch either in person or increasingly on zoom or you basically a whole script written out and this is sort of like in between, you know initially the short stories were based off of these read it posts and then what they realized is that the short story was so popular with executives, they didn't even have to publish them
on Reddit anymore, executives just liked the idea that they could like hold on to something it took less time to read but felt a little bit more you could hold on to it than a pitch. We should be clear, these are self-published online things, it's not like short stories you're going to read like in the New Yorker, right? Totally, they're like pulpier genre pieces, lots of horror, some science fiction, things
like that. How is it that this is happening or actually even as I say this it kind of makes sense. This is happening as Hollywood is pulling back, right? On production, on investment and all of those things and now here comes this new format.
“Totally and I think that that's sort of like the central question of this piece is just like”
is it this bright spot like they're finding a way to get green lights in this Hollywood that is contracting or is it a sign of like the tastes and are like continue to be dwindled in terms of like what Hollywood has an appetite for. And I think it really helps that these short stories also have the capability of becoming two different IP properties. So there's the film TV deals but then also you can make the short story into a book. And so Scott
Glasgow like actually started an imprint with Simon and Schuster and so a lot of these like read it short stories then became successful novel. So he's making two deals on one product.
Are we talking like bidding wars here and like multi-million dollar deals? Is that what we're
talking about? Yeah, these short stories have like some of some of the deals have like 11 bidders. We're talking about huge streaming distribution partners like Amazon like Netflix. One of them happened like the Oscars weekend and people were like trying to get the deal done from the Oscar party. So these are like high profile Hollywood deals. Can I just ask are they all like horror stories as a guy who doesn't do horror at all? Is that
what's going on here? Initially they were all horror stories but now there's science fiction. There's this one called The Earthling. There are sort of thrillers. But one thing that Scott Glasgow told me is that he thinks that like a straight drama probably would not do well in this format like really a lot of the short stories to prove like concept of world like world building and that that's better for like a genre piece. Huh, interesting.
Have to end by saying while there are some big name stars who have been attached. Michael B. Jordan and Nicole Kidman. There, you know, in the mix. There's nothing's actually in production yet. There aren't any movies being made and we're not going to see it at the centerplex anytime soon. Not any time soon but they're working on it as what I've been told. Fair enough. Antonio Saraje though at LM material. Antonio thanks a lot. I appreciate your time. Thank you.
This final note on the way out today is his Catherine and Stacey now. We're talking about Jay Powell's last official day as fed share. He will be around for a while longer as a rank and
found member of the board of governors. But I want to go back right now to Paul's first broadcast
interview after he got the job. It was on this program July of 2018 and what was at that point still a pretty un furnished office. Let me ask you then about inflation and about prices which are as you say starting to tick up to where the Federal Reserve wants it to be. I'll note here that we're talking at eight 24 in the morning on day the consumer prices come out and they come out in six minutes with the caveat that this is going to air now in five, six hours from now whatever it is.
“You have the number in your back, but you know what the number is. Inflation CPI?”
Well, let's just, let's just say that I do get a look in advance at these things. Yes. You're not going to tell me what it is even though definitely not going to air this until definitely not score one for the chairman's adherence to the rule. Not going to say anything that would suggest what I might be absolutely fair enough. Much will be said about J. Powell and his time as chair, not all of it great as he has admitted here and elsewhere. But had we known then
what we know now about how his term has gone and more importantly how it is ending. Maybe we could it anticipated him sticking around. Our theme music was composed by BJ Leaderman Marketplace's
Executive Producer is Nancy Fargolly, joined Griffith, is the Chief Content O...
Vice President and General Manager. I'm Kyle Rosnell, have yourselves a great weekend everybody.
“We'll see you back here on Monday, alright?”
Hey, it's Francis Lamb, host of the Splendid Table Podcast. Every week on our show,
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