The crackdown on prediction market insider trading

or two about the state of play and this economy. From American Public Media, this is Market Play.

“In Los Angeles, I'm Kyle Riznall. It is Tuesday today, the seventh day of April”

is always heavy along everybody. Our through line today as it was yesterday and as it

will be the rest of the week, unless and until events change our mind is inflation. Price levels as you know, we're already elevated to and war does tend to be inflationary about which the war that is given the president's public pronouncements the past 18 or so hours and observation must be made. Markets are not the economy as you know, nor as we're seeing are they at guard realm. Stocks basically flat today in the face of the

president's astounding threats. With that as prologue Thursday Friday this week, bring us two of our regularly scheduled updates on inflation. PCE, the Fed's favorite, and then the consumer price index. That is hard data. Today, though, something softer, the New

York Fed's survey of consumer expectations for the month of March for that first month

of the war. Consumers said they think inflation a year from now is going to be 3.4% that is up from 3% even they were thinking back in February. Then you'll recognize more on that. Consumers tend to base their inflation expectations for the future on prices they see today. Specifically on prices that they see often. Loreta Mester is with the Wharton School. Consumers are going to be buying gasoline maybe once a week if they're using their card

a commute. And that gas price keeps climbing as the war in Iran continues. And yet, Bill Adams of 5/3 bank says, "I was actually a little surprised that inflation expectations didn't rise more than they did." Adams says expectations were higher in past energy shocks, with the Russian invasion of Ukraine in 2022. In this case, he says consumers aren't sure the war in Iran will last all that long. It looks like consumers were expecting this conflict

to be a relatively short-lived one, and it's impact on the U.S. economy to also be relatively short-lived. Inflation expectations for 3 to 5 years out barely budged. Still, Caleb

“Rune of Morning Consult says the rise in the short-term number is important. We see that consumers”

are already changing their behavior. Well, they're spending more on gas. We're seeing consumers saying they're cutting back on other categories while this sort of price shock is hitting. That could hurt consumer demand, bringing inflation down. But if consumers continue to expect higher inflation, well, they might just get it, says Bill Adams of 5/3 bank.

The Fed is incredibly attentive to expectations because they see inflation as basically set

by forward-looking expectations that become self-reinforcing. Adams says if people expect higher prices in the future, they'll buy more now. And that added demand can raise prices all on its own. I'm Daniel Acrement, Full Marketplace. Wall Street on this day of the President's deadline, as I said unfazed, we will have the details when we do the numbers.

sometimes. I had a conversation the other day about oil prices. The difference between brain crude and west Texas and how futures prices and spot prices compare. Well, along those lines here is today's tidbit. You want to barrel a crude right now on the spot as it were? That'll be $144.46, since thank you very much, a record. What's important about that price, other than its absolute level, is that it's in dollars

as are almost all oil trades globally. Part of what's come to be known as the petro-dollar system, a system that is under some pressure a month and a week or so into the war and Iran. We've called Edward Fishman for a Primer. He's on the Council of Foreign Relations, also the author of choke points American power in the age of economic warfare. And we're welcome back to the program. Thanks for having me, Kai. Let's just do a very quick primer here

“on the petro-dollar system. Why countries pay for oil and dollars?”

Sure, this is a lynch pin of the dollars role as the primary currency in the global economy.

embargo in 1973, the United States economy was in terrible shape. We were running big deficits because of the Vietnam War and inflation was spiking. And Richard Nixon's treasury secretary, this guy named William Simon, came up with an idea, what if we could persuade the Saudi government, the main seller of oil in the world, to sell its oil in dollars and take the dollars that

it earned from selling oil and using that to buy US government debt. Basically plugging US fiscal

deficits. And that was the origin of the petro-dollar. In exchange, the US agreed to allow the Saudis to buy US government debt outside of the normal auctions and we also provided the Saudis with military assistance. But that was the foundation of the petro-dollar and it was a deal that was persisted to this day. And it's other Gulf countries as well. And basically what happens

“is oil dollars get recycled back into US government debt. That's right. And it's been essential”

to allow the US to run these fiscal deficits year after year after year. But it's also been more important than that. But oil is the world's most traded commodity. And the fact that that is priced in dollars and settled in dollars around the world has produced so much demand for dollars and has fundamentally put the dollar at the center of the global economy. Okay. Here we are, April of 2026, the street of our mouses closed. That oil from those Gulf countries

is locked in. Let us say, what is that doing? What do you suppose that might do to this petro-dollar

system that has benefited the US fiscal leaf for 50 plus years? Well, look, they've always been

outliers. You know, countries that are sort of on the fringes of the system. And Iran has always been one because they've been under sanctions. They haven't been able to transact and dollars. And so

“in recent years, Iran is effectively sold all of its oil to China. And so they've been”

accepting payment in yuan, the Chinese currency. Well, what's happened now is by establishing itself as gatekeeper of the Strait of Hormuz. Iran doesn't just control its own oil supplies. It's controlling, you know, 20% of global oil exports on a daily basis. And allegedly what they're doing now is they're telling tankers that in order to get through the Strait of Hormuz, they have to pay

our toll to Iran in yuan in RMB. And so Iran is taking direct aim at this petro-dollar system

and really trying to change the global paradigm as a consequence of this war. You know, the demise of the US dollars, the Gulf Reserve currency has been foretold often and with some degree of vociferousness. It has yet to come to pass and it's not coming tomorrow, but one does imagine that if the petro-dollar system goes away, that could speed up a little bit. If the petro-dollar were to go, that would be a huge chunk in the armor of the dollars roll. It wouldn't necessarily spell

the end of it, but you just gotta imagine, this is the world's most traded commodity, oil. If oil starts being priced in Chinese yuan, that would be a substantial knock to the dollars roll

“and, frankly, a boon for China. Is it too late, do you think, to stop this, you know, potential slide?”

It's not too late. You know, one of the other countries that had been outside of the petro-dollar system up until very recently was Venezuela. Before the Maduro raid in January, Venezuela was selling almost all of its oil to China and accepting payment in RMB. Well, just hours after former Venezuela and President Nicholas Maduro was dropped off at the Metropolitan Detention Center in Brooklyn, the Trump administration announced that Venezuela and oil would henceforth be priced in dollars.

And so they have sort of forcibly brought Venezuela back into the petro-dollar system. I think the outcome of this war in Iran, whether Iran actually does establish itself as gatekeeper of the straight-of-war moves or whether the U.S. can successfully reopen the straight, that will be profoundly important to the future of the petro-dollar system. Edward Fishman is at the council on Foreign Relations. He's also written a book, a very relevant to our conversation today. It's called

chokepoints. Eddie, thanks a lot. I appreciate your time. Yeah, it was my pleasure. I'm going to talk to you. [Music] The good news is that a week or two ago, the prediction market's calcium polymarket rolled out new policies that they said will limit insider trading. Politicians wouldn't be allowed to trade on their own campaigns. People involved in professional college sports wouldn't be allowed

to trade on the sports that they're affiliated with. And the commodities futures trading commission said that going after that kind of insider trading is an enforcement priority.

is universally recognized as "bad." Kinder? As Marketplace of Megan McCarty Carino reports? To understand what's going on with prediction markets right now, it helps to have a working knowledge of the 1983 movie Trading Places, which turns on a plot to trade on stolen government information.

There's a lot going on, but basically Eddie Murphy plays a down on his luck,

con man, and Dan Akroy is a Weidi-toidi commodities broker. Work Belays. I have a hunch something very exciting is going to happen in the portfolio market this morning. Akroy's evil bosses, the Duke Brothers, and Akde, convoluted scheme to make the two trade places as a social experiment. Are we talking about a way to random? Then Murphy and Akroy

“team up to get revenge. It occurs to meet at the best way you heard rich people is about”

turn them into poor people. They intercept a secret USDA report on the Orange Crop. The Duke's were planning to use to make a killing on Orange Juice futures. They feed the Duke's a fake

report, and then they use the real secret information to get rich themselves and retire to a tropical

paradise. Looking good, Billy Ray. Feeling good, Louis. The setup is pure Hollywood, but the idea that you could get away with a scheme like this was accurate, says Andrew Verstein, a lot professor at UCLA. For most of the American history, if you came to have some information that gave you a really strong sense of what was going to happen in commodity prices, you could trade commodity futures and options and make money with that information, and there

“wouldn't be any possible legal consequence to you. He says commodities were seen as different”

from stocks. They don't have shareholders who would get screwed over by stock price manipulation, and most people trading in the markets, like farmers with knowledge of their own crops, are insiders to a certain extent. It wasn't until 2010 with the passage of the Dodd-Frank Act that trading on material, non-public information was actually made illegal in commodity markets. The CFTC chairman had gone to Congress and said, "We actually do want to be able to

prosecute insider trading. We saw the movie trading places, and we want that stuff to be illegal." One provision was even nicknamed the Eddie Murphy rule. But Verstein says how the law should be applied in the real world is still somewhat unsettled. And how it should be applied to prediction markets, which, yes, fall under the same regulation as orange juice futures, that's even more unsettled. I am mostly interested in these as an information institution. The main social value is that they

tell us about things. Robin Hansen is an economist at George Mason University and part of an intellectual movement that has long promoted prediction markets as powerful forecasting tools.

“Want to know if rent control will affect housing prices or if interest rates will rise or fall?”

Prediction markets, the argument goes, "Give you fast real-time data." The aggregate beliefs of people willing to put their money where their mouth is. And that means we want it to be okay for people who have big advantages to use them, because that'll give us the information. Inside information makes predictions more accurate. But it can also lead to corruption and mistrust, says, "yesha yada, a lot professor at Vanderbilt University.

People may never want to get involved ultimately down the line if they feel like hang on,

you know, this market's going to be super rigged against me at all times." She says there's broad consensus the law prohibits people from trading on government secrets or stolen information. Kalshi and Polly Market have also banned anyone with influence on real-world outcomes from betting on what they call events contracts. But yada says, "Inforcement is the challenge."

Prediction markets are home to goodness knows how many different types of contracts. The number of contracts are multiplying and proliferating every single day. She says it looks like the platform's recognized insider trading is a threat to their business and are taking actions to prevent it, at least in the US. Some of the most questionable bets have happened offshore, where Polly Market allows trading anonymously.

I'm Megan McCarty Carino from Marketplace.

My kind of airport I'll tell you what, but first, sure what, let's do the numbers. Alan Duster was off 85 points today, 2/10%, 46,584, but as that rose, 21 points, a 10th percent, 22,000, and 17, the S&P 500 ticked up 5 points that's just under a 10th percent rather, 66 and 16. We heard from Megan McCarty Carino about insider trading and prediction markets.

“How about some associated company, shall we say? Robin Hood markets incorporated?”

It started, as you know, as a financial market trading apt if 2/10 to 1%,

draft kings added 2/10 percent, flutter and attainment, that's the parent company of Fandel,

subtracted about a 10th of 1%. Sorry, subtracted about 1% on today. Intel is going to be working with SpaceX, XAI, and Tesla to create specially designed chips for both companies that Elon Musk's planned, tariff fab, facility and Texas tariff fabs chips are going to be used in Tesla Robotaxies. Also, it's Optimus Robot Project, what could possibly go wrong, Tesla down one and 3/4 percent today. Intel claimed about 4 and 2/10% Intel competitor in video,

in step 1/4 of 1%. Bond prices rose. The yield on the 10/10 of Fell 4.30% you're listening to marketplace.

“This is Marketplace, I'm Kai Rizdong. Among the many, many slices of this economy that the federal”

government measures is a category known as Durable Good, orders placed with domestic manufacturers for everything from industrial machinery to washing machinery, expensive stuff that is supposed to

last. We just got data from February, Durable Good's orders down 1.4% the third straight monthly

decline, and you know what, 3 a trend does make, and it's a trend that predates the war. Marketplace is Novosafo makes it make sense. Durable Good's orders can be very volatile month to month. One large order of Boeing, and it looks like we're doing well, and one bad order of Boeing, and we're falling out of the sky, if you'll excuse the metaphor. Ari Schwader at the University of Michigan says, look over a longer time horizon, and orders

have declined in four out of the last five months. This could be taken as an indicator that things

are slowing down, but that slowdown is uneven. Jason Miller is with Michigan State University.

A lot of sectors that are more sort of consumer centric are, and maybe a little bit of a weaker condition than what they were heading into last year at this time. But business investment, especially in technology, is strong, think AI automation. The business investment measure called core capital goods orders increased about half a percent in February.

“It's important to remember that February is a pre-war reading.”

Bernard Yarrow, so if Oxford Economics says the data still has to catch up with higher energy prices. The trajectory for capital spending by businesses, it is just not going to be as robust as it would have been in the absence of voltage of political tensions in the Middle East. And there's not much room to maneuver, says Hittendra Chattervady at Arizona State University, because tariffs are still taking a bite out of economic growth.

At this moment, we are barely holding our head above the water. If the energy shock caused by the Iran war persists, things could go south very, very fast. The silver lining, analysts say, is that AI spending and new tax breaks for capital expenditures should prop up business investment for now. I'm Nova Soffield for Marketplace. [Music]

You don't have to have been squeezed in a middle seat on a totally booked flight or have been stuck in an airport delayed for some reason or have heard the news about far worse things happening to know that our airspace is overcrowded and under-resourced. Meanwhile, passenger numbers just keep going up. And that traffic the FAA says is expected to increase especially quickly at the big hubs, airports that each handle at least 1% of commercial passengers every year think Atlanta and

Chicago and LAX. But we do have hundreds of smaller airports that could help alleviate some of

So anytime she wants to fly, she has to choose from a few different airports all a few hours away.

“There's the three-hour drive to Boston, Logan, a major international hub that handles more than”

a thousand flights a day or just under two hours to Vermont's largest airport in Burlington. And with about 30 departures a day, there aren't nearly as many destinations to choose from. But it is a nicer airport and it's quieter and there's no wait times. Up until recently though, there was a downside. Four of the airports gates were clustered in one narrow hallway. They used to wait in that long hallway and it was so hot

and it was, you know, never, it never felt clean because it was just so old and worn out.

But that changed in late March when the Burlington airport opened a new spacious area of the terminal funded by a $34 million congressional earmark. Four new gates, high ceilings, lots of space to spread out. Draconis was on the first flight to depart from one of the new gates.

“It's like amazing. There's a fireplace and the kids play room and everything I had no idea”

that it was going to be like that. Making this small hub airport a lot nicer could help relieve some of the congestion at other big hubs, like Boston at least a bit because Burlington is competing for market share. The airport's director of aviation Nick Longos says Burlington

attracts half of the three million or so passengers that fly in and out of its market,

which stretches from northern New York through New Hampshire. That means there's another 1.5 million flyers that choose other airports. His goal get more of them to choose Burlington. So people don't have to drive two, three, four hours to find a flight. If we have it here, we'll be able to serve that same customer. And in turn, that customer won't be adding traffic to Boston's skies. But enticing airlines to spread routes to more small hubs like Burlington is not an easy sell,

says Robert Mann an independent airline industry analyst. The issue is, you know, people want to fly where they want to fly, they want to fly from and to those big places. And airlines build their networks to serve the most profitable routes. The borrowers phrase, a lot of people rock banks, well that's where the money is. Why do people want to airline schedule to these major airports? Well, that's where the money is. So big hubs end up with more service and

congestion than small airports. The FAA projects that activity at large hubs will grow about twice as fast as at small hubs in the coming years. At the same time, the country faces a persistent shortage of air traffic controllers, says Dan Bob, a professor in residence at the University of Nevada, Las Vegas. It makes one wonder, is our air traffic system reaching its saturation point in terms of the maximum level of stress it can handle? One short term solution, Bob says,

the FAA can tell airlines were capping the number of flights at certain hubs during peak hours. It's going to be a difficult conversation though because airlines don't want to cut their flights. But the conversation is already underway that one major airport Chicago O'Hare. In March, the FAA told airlines that they'd overpacked their Chicago schedules for this coming summer. So regulators may limit the number of flights in and out of O'Hare. The similar limit is

already in place at Newark Airport in New Jersey. Capping flights isn't an ideal solution,

Bob says, so in the long run, he thinks the industry should take a second look at smaller hubs.

“They get overlooked. It thinks they're undervalued and I think it would be”

prudent to strongly consider increasing their visibility and making greater use to them. In Burlington, aviation director Nick Longo hopes that happens. His next goal is upgrading the other six gates at the airport. We need to adjust our Jetbridge's work, how people get access to these aircraft and some space to do it. The airport was designed in the 1950s, he says, to gain more market share, it needs to stay up to date. In Burlington, Vermont, I'm Henry App,

the Marketplace. This final note on the way out today in which I'm going to repeat myself, but it does seem like today is a good day for that. The institutions of this economy depend on the institutions of this democracy, fair regulation, transparency, the right of recourse when wrong and the rule of law, international law, too. Georgia, Manji, Sonia Maharaj, Janet Win, Olga Oxman, and Virginia case Smith are the digital

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