The Francis Scott Key Bridge, two years later

It is kind of a choose your own economic misadventure with this war.

“What are you more worried about inflation or growth from American public media?”

This is Marketplace. [MUSIC]

In Los Angeles, I'm Kai Rizgalli, it is Thursday today, the 26th of March, good as always to have you along everybody.

The risks of this war come in many forms, as we know, and most of them are being covered in depth elsewhere, but for us, what we're worried about falls into two big buckets. Threats to global economic growth and threats to global inflation. Along those lines, this news item today, a projection from the organization for economic cooperation and development that says short run global inflation is going to be 1.2% higher

on average than it would've been had the past three weeks never happened. Also relevant, the OECD didn't as in did not raise its forecast for global growth as it was expected to again three weeks ago.

“So which risk ought we worry about more?”

And places know the south of starts us off.

Before the war in Iran, the global economy was on a relatively strong footing. With insulation around the world, coming under control and growth going to be pretty decent. Each war per cent, Professor of Economics at Cornell, says economies have been benefiting from AI infrastructure spending and lower overall tariff rates in the US after the Supreme Court struck down a bunch of them.

At one level, one could argue that it's good if good can be used in this context that you know, the world economy is being hit with a negative shock at a time when it looks somewhat resilient. That shock, of course, is the effect of closure of the straight of her moves. The OECD's figures under score per sots point.

Its projecting slightly slower global growth than expected, but still growth at 2.9%. And that could happen if there is massive or long-term damage to oil production facilities in the Middle East. Inflation is another story. The OECD forecasts a boost to 4% on average among the world's biggest economies from

higher energy prices. In May of Oxford Economics says the risk is that those price increases spread elsewhere. If things like the shortage of fertilizers and the higher energy cost per shut things like food prices, but also perhaps the price of some other energy-intensive goods and services.

Most central banks are likely to worry about that risk first, says Neil Sheering of capital

economics. Their primary concern is going to be that another energy shock and another leg-up energy prices will deanker inflation expectations. As in, we'll expect more of it and create a self-fulfilling loop. The key ingredient in all of this analyst's say is time.

Can the Iran War end soon enough to avoid worse economic damage here and abroad? I'm Nova Soffle for Marketplace.

“Wall Street today, I'm going to give you the taco trade update because that's what seems”

to be driving markets of every variety during the session. Equities were terrible would be a fair word, but 11 minutes after the closing bell. The president said on his social account that he is, and this is a quote, "posing the period of energy-plant destruction by 10 days to Monday, April 6, 2026 at 8 p.m. Eastern Time. Thank you for your attention to this matter."

He also said the president did that the Iranians had requested that pause, a fact check on that is obviously impossible. Details on the pre-taco session when we do the numbers. A barrel of crude oil today, let's use the global benchmark show. We Brent North see up almost five and a half percent your shy of $100 and $8 a barrel.

But whatever the day-to-day change that we are all watching and feeling best not to expect the Federal Reserve to do too much about it, as Chair Powell said more than once at his press conference last week. It of course is kind of standard learning that you look through energy shocks looking

So we're going to take a couple of minutes to explain what Powell meant by that little nod

“to macroeconomic management because it's important that you understand why the Fed mostly”

looks through energy shocks. Looks through, by the way, it's a kind of a speak for ignore. Hi, my name is Brian Blank, I'm an associate professor of finance at Mississippi State University. My name is Karen McDaniel, I'm a clinical professor of economics at Arizona State University. They are our panel today helping us break down what Powell said and what he meant.

I assume he's meaning that in response to higher prices, it is not going to be appropriate to raise interest rate targets. We know that usually when inflation starts going up, the Fed starts raising interest rates. See, also those rate hikes of 2022 and 2023.

However, comma, these are not usual inflation times because the price increases that we

have seen so far and most of the price increases yet to come are in energy which along with food, the Fed usually ignores. The core number is what they want as in core PCE. You hear me say that all the time, core matters because food and energy prices are volatile and really not a good way to predict where overall prices are going to go.

Drought and Iowa, for instance, smaller soybean crop, higher prices. The Fed is going to look through that same same for energy prices now going up because of a war. That has resulted in what they're going to call a supply shock. This is language that economists and people in my profession talk about all the time, but

“I think if I went home and talked about it with my family, they would look at me like”

I had three eyes. So we can avoid anybody looking at us like we have three eyes. A supply shock is exactly what it sounds like the supply. In this case of oil, moving through the economy is suddenly a lot less than we are used to.

And an interest rate increase can't really do much to help that.

But because there is always a butt, there is a scenario where the Fed would raise rates

in response to everything that's going on right now. They are watching long term inflation expectations. If this energy shock leads people thinking prices are going to be higher for longer, that can lead to a cycle where prices keep rising faster. Inflation expectations, we talk about this on the program all the time, can be a self-fulfilling

prophecy. So the Fed's challenge is to keep inflation expectations in check, even though people are still feeling all the other supply shocks of the past few years, COVID. Russian invasion of Ukraine tariffs. And now war.

After each one, people are starting to think maybe this is just normal. This is how it is. And I think that is part of what they're waiting on, but they're definitely concerned that people are starting to assume that there's another shock coming. To be clear, inflation expectations aren't showing that yet.

If you look at measures of long term inflation expectations, they're hovering in the neighborhood of 2%. 2.3% to be precise, that's according to the Federal Reserve Bank of Cleveland, pretty much where the Fed wants it to be.

“I think that's what I have learned over the last few years is that people see higher prices,”

but they're long run still seems to be relatively stable. And so I haven't interpreted that as the Federal Reserve has done a really good job ensuring people that they take this very seriously. And credibility is what that is, yet another thing that we talk about all the time on this program.

Special thanks to Brian Blank at Mississippi State University, Kermick Daniel also at Arizona State. In the very early hours of March 26, two years ago, a container ship hit the Francis Scott Keybridge over the board of Baltimore. The bridge collapsed, six construction workers were killed, the city and the harbor lost

an iconic piece of infrastructure, and the region lost a key piece of interstate highway. On an average weekday more than 38,000 cars and trucks cross the Keybridge on interstate 695. It is being rebuilt not going to be done though until late 2030 fingers crossed, which means that until then, as Marketplace is Stephanie Hughes reports, commuters are going

to be feeling it. Before he leaves through his evening shift at the port of Baltimore, Dave Coslin checks to make sure he's got all the necessary gear. "You know, I've got rain boots on the rains, I mean the regular shoes, if it doesn't

believe they're rampant down there."

71-year-old Coslin is a longshoreman.

“He works as a line handler, which means he attaches rope to the cargo ships coming into”

dock at the port, and he's itching to get there. "Coslin lives in severed Maryland to the south of Baltimore. He used to take the Keybridge every day. Now, he takes the Baltimore Harbor Tunnel, and everyone else who used to take the Keybridge at Seams."

"Look, your stratics learn a little bit where it's right here." The loss of the bridge being strivers like Coslin are collectively spending an extra 21,000 hours of time in traffic every weekday. That's according to a spring 2024 analysis by the state. Coslin says his commute has gone from a tight 20 to more than an hour on some days.

"Course you don't like to be late for work, because ships come in as four guys, man's three hours of tie it up, and if you're not there, it makes it hard on three guys." Coslin says he's more likely to turn down a ship now, if he doesn't feel like dealing with traffic. He's also spending more on gas and on food.

He used to go home to eat. Now he's more likely to stain your the port and grab a bite out. He used to get angry when he hit the traffic. "I'm accepting it now. It's nothing I can do about it.

I got accepted. You know, I got to deal with it." Even if Coslin is dealing with the traffic, the state says it knows he's tired of it. "He is part of the reason we're working so hard." That's Maryland's governor, Westmore.

And the reason we're down here making sure this bridge can get rebuilt as fast as possible is because I want to shorten his commute. It's taking two years longer to build the bridge than originally expected.

The state also more than doubled the budget, saying it could cost up to $5.2 billion.

The federal government is going to cover the cost. Other points out both the original timeline and cost estimate were released just days after the collapse. While the state was dealing with an act of disaster. "We literally still had bodies in the water, where we were searching to make sure we

were bringing closure and comfort to these families that lost people. And a lot of those estimates were based on when that bridge was built in 1975."

“Maryland is not rebuilding the key bridge of the 1970s.”

Instead, the state has designed a taller, longer, cable-state bridge that will be able to accommodate bigger ships underneath. "We've got to not just plan for the present. We have got to prepare for the future and how we think maritime communications, maritime operations, and maritime commerce is going to continue to evolve."

Maryland designed the bulk of the new bridge in 14 months. The state says that process takes on average seven years. It was also able to expedite its environmental review. But Jim Harkness, chief engineer for the Maryland Transportation Authority, says building a bridge that's over two miles long, takes a while.

Just building and putting in the foundations out in the water is about a year's process. Then we start coming vertical and building those towers at the 600 feet approximately two years. Imagine a kid building a bridge out of blocks. But in this case, each of those blocks is 20 feet long and takes a month to get in place.

And even people who are inconvenient say they know this can't be rushed. Longshore and Dave Coslin says this is a big project. "That's a lot of work and planning. That's a lot of work." Still, as a guy who works nights and weekends himself, Coslin says he wants to see the state

putting in the same hustle that he does. In Baltimore, I'm Stephanie Hughes, from Marketplace. Coming up, the crisis currently unfolding in the Middle East. That is giving our supply chain teams a lot of headaches. If only headaches were the worst of it, huh?

First though, let's do the numbers. Down in Dostrils, down 469 today, 1% 45,960 that has decked down 521 points. 2% and 410% closed to 21,480 S&P 500 dove, 114 points, 1.7% 64 and 77.

“Let us remember though, the Taco Tree at 11 minutes after the closing round.”

Designer Brands, parent company of the DSW shoe store chain as well as brands like Kids and Jessica Simpson and other news Jessica Simpson as a shoe brand. Anyway, report according to the earnings today that comes with Ohio, but his company

reported a loss of $20 million, that's 40 cents a share.

Good news is, that was only half of what it was in the fourth quarter of last year of 2024. That is, Designer Brands ascended 5% on the day, bonds down, yield on the 10-year tino rose, 4.40% you're listening to Marketplace. This is Marketplace, I'm Kai Rizdon.

We're going to detour now into the labor market Friday next. Bring us the March jobs report by a way of reminder we are at 4.4% on the unemployment

Today, though, we got our regular weekly update on what seems to be solidifying as a low

“higher low fire labor market, there were we are told 210,000 first time claims for unemployment”

insurance last week, up just to tad from a week earlier, but still low by historical standards. There is, though, a curiosity year, the number of continuing claims for jobless benefits. They fell by about 32,000 a week before last and they have been trending down since late last year, which gets us to this. If it is so hard to find a job right now, which it is low higher low fire, why are fewer

people filing those continuing claims? They know Akimina has that one. The war in Iran has pushed energy prices higher, but Guy Berger of the Burning Glass Institute says employers haven't really reacted. It does not mean that layoffs aren't coming, but so far they are not showing up.

He says layoffs have actually been low for months now, that's a big reason continuing

unemployment claims have been falling. Another reason is the growing share of job seekers who aren't filing those claims. The majority of the unemployed are typically not eligible for unemployment insurance. That's Stevenson at the University of Michigan says you need a work history to get those benefits.

There's a lot of young people trying to get entrance into this labor market, who are struggling to do so, they're not eligible for unemployment insurance. Then there are the folks who have been filing claims, month, after month, after month, says Ali Bustamade an economist at the University of New Orleans. The length of unemployment duration has actually increased drastically.

To the point where many have maxed out their benefits, most states allow people to collect unemployment for about six months, and the share of job seekers who reached that maximum before finding a job has climbed. From around 30% in 2022 to around 40% at the start of this year, according to data from the labor department, the diminishing continued claims is largely a product of just folks

rolling off of benefits instead of actually then being re-hired. Where the labor market goes from here depends in part on where the war in Iran goes from here, says Michelle Meyer at the Mastercard Economic Institute.

“The key question is, are over the duration of this shock?”

She says, if the war drags on, the energy prices remain at uncomfortably high levels, then I think you start to see the shift in behavior, both corporate behavior and consumer behavior. She says that could make life even harder for job seekers, especially in sectors like manufacturing that are the most sensitive to energy prices.

I'm Daniel Acreman from Marketplace. Supply chain disruptions because of the war falling to both of the buckets I mentioned a minute ago. Growth and inflation. You can't grow.

The prices are going to go up if supply chains break down, right? That is a challenge that affects all kinds of businesses. Yesterday, we heard about what it means for a direct consumer flour business, non-profit organizations are feeling it too and sometimes more complex ways. That's why we've called Yanti Soripto.

She is the president and CEO of Save the Children, U.S., she's also worked in leadership on the international side of that organization as well. Yanti, it's good to talk to you again. Thank you for having me. You know, I was looking back at the very first interview we did almost two years ago now,

year and a half or so, and it was all about supply chain management and how critical that

was for you and what you were doing with Save the Children, U.S., and it occurred to us and this is why we've called you that supply chains now are getting tenuous again and I wonder how that's affecting you. Yeah, that is one way to put it, the guy indeed is definitely the case. Look, just to take us back, you know, of all of our humanitarian responses that we do across

the world and certainly also in the Middle East, the supply chain makes up about 75 percent of that humanitarian response in terms of cost. So as you can imagine with the crisis currently unfolding in the Middle East, that is giving our supply chain teams a lot of headaches. Did I read somewhere that there are shipments you've got going where the supply chain

“costs are worth more than the relief supplies themselves?”

Is that happening? Yeah, in certain cases that is literally what's happening and it's actually not even in the Middle East. We have currently stock of pharmaceuticals stuck in India that we cannot transport across the road anymore to Afghanistan, which is where the destination is.

We're looking at air freighting it, which is already incredibly expensive and it is now twice as expensive as it was before this crisis in the Middle East started because of all prices. When you speak with your regional directors on the ground in the more troubled parts of the world right now, what are they telling you it's like?

let's say, or in Gaza, or in Lebanon for that matter.

“And of course, it's become a lot, a lot harder still, specifically when you look at Lebanon”

now, over a million people displaced, there's an immediate direct link between a war starting

and people being displaced and kids being out of school, etc. So we're responding there and we're proud of it because we did have some prepared business there in terms of extra stock, our team is being ready to respond, expecting a certain level of escalation. But if you're in Sudan where we are still in Darfur, one of the few large organizations

still able to work there, and our stocks are depleting, of course, incredibly concerned. The second time we had, last year, it was a conversation about USAID cuts and what that was going to mean for your leaf efforts, and you talked about how tight the budgets were back then. So oil prices up, logistical prices up, supply prices up, I imagine, you're even more squeezed

than ever now. Totally. And we're really looking at optionality. We have a very diverse set of suppliers, of products in order to already deal with volatility. But now that's become even harder, let me give you an example, in Dubai, actually a lot

of humanitarian organizations started to make sure we have more stocks available there, particularly with an eye on Asia, and to have more options to not have everything, for instance, either in Europe or in the United States. And of course, now we have medicine stuck in Dubai. We now can't use the original ocean route to get it into Darfur.

That means we have to reroute it.

“So there's additional, of course, red tape and pulse are now up 20, 30 percent, right?”

So all of a sudden, that's scarce funding is not able to go as far as it could. You said optionality a minute ago, and I picked up on that word because it sounded very corporate to me. You, of course, have a corporate background. We've talked about that.

Any sane corporation at this point, with a regular for-profit business, would look at the Middle East, would look at Lebanon, would look at places where you are, and say, you know what, it's not worth it, we can't do it. Is that an option that you're thinking about?

That is never an option for save to children, guy.

Our mission is to serve children, and quite often that is in the hardest to reach places. And, you know, getting there has just become a little bit harder and a little bit more expensive, but we are incredibly determined. We have a lot of creativity in the team, and they're going to keep on trying. They have found an alternative route to get the stuff out of Dubai into person and it's

more expensive. We're going to motor behind it. We have taken quite a more assertive position, also, with some of our suppliers. These are mostly commercial vendors, by the way, not just manufacturers, but also trade for wireless logistics companies.

Insurance companies. And here, I would make a plea to the private sector to think about what they can do to help. If insurance costs, all of a sudden, become $3,000 per container if you want to get something out of the Middle East. We have made pleas for humanitarian exemptions.

Given the extraordinary circumstances, I mean, a collective view from humanitarian agencies towards the private sector here could really help. Are those please being answered? Well, this particularly was indeed being answered for which we are grateful, and, you know,

I'm encouraging our teams, but I will also encourage our amazing partners from the private

sector to be open to that conversation. We understand that costs have gone up everywhere for everybody, but whatever it is that they

“can do to help us fulfill our humanitarian mission would go a long way, I think.”

Yeti's are up to a president, also the CEO of Save the Children US. Yeti, thanks very much for your time, I know you're busy. Thank you, Guy. This final note on the way out President Trump had a cabinet meeting today. Many, many words were said, including these.

I thought frankly, I thought the old prices would go up more and I thought the stock market would go down more. The thing is, he's right, if you talk to oil and equities analysts, they don't understand why the reaction hasn't been bigger. The market is an idiot, words to live by, I'm telling you.

Our daily production team includes Libby Burdette Andy Corbin, Real Hall in Horst, Sarah Leeson, Sean McCandrie McCellusia, and Sophia Terenzio. This whole story is the supervising senior producer and I'm Kyle Rizdall, we will see tomorrow everybody.

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