The Fed's got an interest rate decision to make

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Speaker 5 You want data, J-PAL?

Speaker 5 We got data from American public media. This is Marketplace.

Speaker 5 In Los Angeles, I'm Kyle Risno. It is Monday, today, the 16th of June.
Good as always to have you along, everybody.

Speaker 5 Let's do a little, what is J-PAL thinking as a way to get going today, huh?

Speaker 4 Spoiler alert, I have no idea.

Speaker 5 It's been a while since we've heard from the Fed chair.

Speaker 5 But if what's passed is prologue, as members of the Federal Open Market Committee start their fourth meeting of the year tomorrow, it is a very, very safe bet that Powell and the gang will have been poring over the data trying to figure out what exactly is going on in this economy.

Speaker 5 Data-wise, this week, we've got May retail sales tomorrow, also industrial production for last month, as well as business inventories for April.

Speaker 5 That's important to know how much stuff companies had on hand during that really volatile month.

Speaker 5 If you remember back to April, Marketplaces Henriett has more on what all that data might be telling us and what it might be telling the Fed about this moment in this economy.

Speaker 6 These kinds of data releases are puzzle pieces that can help answer larger questions about the economy, according to Ann Owen at Hamilton College.

Speaker 7 And right now, I think the big puzzle is why was inflation in May so low?

Speaker 6 We've been hearing for months now that tariffs would drive up prices, but inflation barely budged in May. Data this week could help tell us why.
Owen has some theories.

Speaker 7 One is consumer demand is low, and the other would be that firms had stockpiled some of their inventories in order to kind of get ahead of the tariffs.

Speaker 6 April's inventory numbers tomorrow will show what businesses were doing as the president imposed, then paused his so-called Liberation Day tariffs.

Speaker 6 Meanwhile, retail sales will give us some insight into consumer demand in May, after consumers did a lot of shopping in March and April to try to get ahead of tariffs.

Speaker 6 Yelena Sholyetyeva is at the conference board.

Speaker 8 People pull their purchases forward. Myself, guilty.
You know, purchased a couple of kids' shoes and stuff like that ahead of what we thought tariffs would look like.

Speaker 6 Now she says consumers may be pulling back. Amid all that, tariffs are supposed to encourage companies to make more things in the U.S., which industrial production helps measure.

Speaker 6 For example, says Emily Blanchard at Dartmouth, companies might buy more domestic steel and aluminum now, which would increase production.

Speaker 9 But they're pairing those metals purchases with a bunch of other products that also became more expensive because of other tariffs.

Speaker 6 All these moving parts, she says, make it really hard to get a full picture of where this economy is going. I'm Henry Epp for Marketplace.

Speaker 5 Nothing happens in a vacuum in this global economy of ours, of course, not even central bank meetings. The Swedish Central Bank and the Bank of Japan met today and tomorrow.

Speaker 5 The Fed, Switzerland's National Bank, and the Bank of England coming up later in the week.

Speaker 5 And it's not like they all outright coordinate, but they are all generally aware of the factors affecting all the rest of them.

Speaker 5 And as Marketplace Mitchell Hartman reports, right now, the economic winds blowing on these central banks are swirling in a whole lot of different directions.

Speaker 10 It's not an easy time to be a central banker, trying to figure out whether your national economy is in for strong, steady growth or about to crater, says Jennifer Lee at BMO Capital Markets in Toronto.

Speaker 10 There's geopolitical risk from the Middle East, trade risk from the U.S.

Speaker 11 The uncertainty over tariffs, whether or not they're going to happen, be at these levels, whether or not they're even legal, for goodness sakes.

Speaker 10 Central banks also have specific economic issues to deal with. In Japan, the economy has been improving after decades of stagnation.

Speaker 11 Wages starting to pick up and consumers starting to spend a little bit. Unfortunately, inflation remains stubbornly above target.

Speaker 11 They're uncertain about how much all the tariffs are going to hurt exports. At some point, they're going to have to start raising rates.

Speaker 10 Most other global banks, Switzerland, Sweden, England, are likely to cut rates soon. Cornell economist Ishwar Prasad explains.

Speaker 12 There are many countries where inflation does seem to be coming under control, while economic growth looks pretty bleak.

Speaker 10 But Prasad also says there's hesitancy.

Speaker 12 As some of the Hindu scriptures say, inaction is a very important type of action. The default option for central bankers, which is to do nothing, can be a prudent approach given all the uncertainty.

Speaker 10 Nothing, no change in interest rates is what's expected from the U.S. Federal Reserve this week, says Brian Reeling at the Wells Fargo Investment Institute.

Speaker 13 The economy is doing okay. Employment markets look okay, so not really a reason to make an imminent change.

Speaker 10 He predicts the Fed will hold tight until it becomes clearer how President Trump's tariffs and tax cuts impact inflation and growth. I'm Mitchell Hartman for Marketplace.

Speaker 5 On Wall Street today, traders must have had a pretty good weekend because they were in a buy-in mood. We will have the details when we do the numbers.

Speaker 5 the steel industry update of this Monday comes to us via Pittsburgh, Pennsylvania, headquarters, of course, of U.S.

Speaker 5 Steel, the purchase of which by Nippon Steel was approved by the White House and the conditions agreed to by the two companies over the weekend.

Speaker 5 Steel has, as we all know, been much in the news of late, tariff news specifically, and President Trump's doubling of the import taxes on it to 50%, 5%, 0%.

Speaker 5 That is going to hit big chunks of this economy and consumers in it. But domestic steelmakers have been investing in new capacity ever since the first Trump steel and aluminum tariffs back in 2018.

Speaker 5 So, marketplace Justin Ho went to see how steel has been growing, starting at a new steel mill being built in Southern California.

Speaker 14 The mill is being built in the Mojave Desert, about 90 miles north of downtown Los Angeles. Right now, an excavator is digging a hole so workers can install a water main.

Speaker 15 So right now we're in the process of welding sections of that pipe together.

Speaker 14 These are the very early stages of this project, says Mark Olson. He's VP of mill operations with Pacific Steel Group.
It cuts, bends, and installs rebar for use in construction projects.

Speaker 14 And once the plant is open in a few years, it'll make its own rebar too.

Speaker 15 This project is for us to really vertically integrate and now produce our own reinforcing steel so we're not beholden to out-of-state producers.

Speaker 14 The facility will make that rebar by melting down scrap metal. Olson says that's a big reason why the company is building here in the Mojave Desert.

Speaker 14 because the nearby LA area has plenty of scrap metal.

Speaker 15 And most of that gets put in containers and shipped overseas. The rest gets put in rail cars and trucks and shipped out of state where steel is manufactured.

Speaker 15 So this is an opportunity for us to localize that supply chain.

Speaker 14 Olson says the president's new metals tariffs didn't have any bearing on the company's decision to make its own steel. But he says those tariffs certainly didn't hurt.

Speaker 15 We want to be sure that we're not unfairly impacted by steel coming in that's either subsidized or produced and not playing by the same rules, if you will.

Speaker 14 Ever since the first Trump administration imposed steel tariffs in 2018, there has been a wave of investment in domestic steel production.

Speaker 16 And now assets are being built and turned on and ramped up in the U.S.

Speaker 14 Josh Spores, a steel analyst with CRU Group, says a big reason is that between those tariffs and all of the supply chain congestion early in the pandemic, steel prices rose and steel makers wanted to cash in.

Speaker 16 Any price increase went directly to the bottom line, and that just further incentivized new plans for further investment in the U.S.

Speaker 14 Spore says domestic steel production will grow in the coming years as more new mills come online.

Speaker 14 Philip Bell, the president of the Steel Manufacturers Association, says most of them will operate like the one in Mojave. They'll make steel by melting down scrap metal with electricity.

Speaker 17 Right now, about 70% of all the steel that's made in the United States uses ferrous scrap metal as its primary raw material and electricity as its primary energy source.

Speaker 14 Bell says compared to the old-fashioned methods of making steel, like say coal-powered blast furnaces, the electric method is much better for the environment.

Speaker 17 We're not mining iron ore. We're not mining coal to make this steel.
We are taking steel and basically remaking it into steel again.

Speaker 14 But there are limits to the economic benefits of domestic steel production.

Speaker 14 Alan Collard Wexler, a professor at Duke University, says modern steel manufacturing is incredibly sophisticated and it requires a lot of automation.

Speaker 17 There's labor-intensive and not-so-labor-intensive parts of the economy, and steel is just one of these not-so-labor-intensive parts of the economy.

Speaker 14 And even though the domestic steel industry is being protected by the Trump administration's tariffs, the manufacturing sector, which buys steel, is going to end up paying more for it because those tariffs will lead to higher steel prices across the board, says Teresa Fort, a professor at Dartmouth.

Speaker 19 And, you know, when your costs go up, you have to raise prices and then consumers buy less. And so those firms end up shrinking.
All the firms that rely on steel as an input will shrink.

Speaker 14 A recent paper written by researchers at the Federal Reserve Board of Governors found that the 2018 steel and aluminum tariffs caused producer prices to rise and manufacturing employment to fall.

Speaker 14 I'm Justin Ho for Marketplace.

Speaker 5 Speaking of retail sales, as Henry Epp was a couple of minutes ago, there is an especially disturbing retail trend to make you aware of.

Speaker 5 Not only is Pumpkin Spice extending its sickly sweet reach into summer, Halloween merchandise is hitting store shelves. Now,

Speaker 5 it's June. They've even given the extra early rollout a catchy, I guess, name, Summer Ween.

Speaker 5 I'm not making this up. Marketplace of Megan McCarty Carino went to check it out.

Speaker 21 To get the feel for Summer Ween in action, I visited my local Michael store in Northern California and sculpted through the aisles with my microphone.

Speaker 4 There are one,

Speaker 4 two,

Speaker 4 three,

Speaker 4 four entire like giant racks full of Halloween stuff. We've got a whole disco ball Halloween section, disco ball skulls, disco ball black cats.

Speaker 21 Apparently, disco is this year's vibe for Summer Ween after hippie Halloween hit big last year.

Speaker 22 It's almost like Halloween now is becoming the new Christmas.

Speaker 21 Derek Moore runs the spooky-themed YouTube channel, The Black Hearts Club.

Speaker 21 He posts about all the Halloween product drops at Michaels, Target, and Lowe's, where he's got his eye on an animatronic heavy metal skeleton band.

Speaker 22 Animatronics is the big thing for Halloween, and you'll see everything from Grim Reaps-o'lanterns and everything just lumbering around in people's front yards.

Speaker 21 The creep of a ghoulish holiday into this sunny season might seem a bit odd to some, says retail consultant Neil Saunders at Global Data.

Speaker 23 It's like, look, it's summer. I don't want to see pumpkins and pumpkin spice.
But honestly, retailers do make the sales.

Speaker 21 Because they're giving consumers an occasion to spend, even when many are spooked and not in a fun way, says e-marketer analyst Zach Stanborough.

Speaker 24 Picking up a candy-colored pumpkin that they can put on Instagram is a small indulgence that they can still splurge on.

Speaker 21 And they might have more room in their budgets now before the end of the year spending spending spree. I'm Megan McCarty Carino from Marketplace.

Speaker 6 Coming up.

Speaker 25 You know, if you don't like sand, you shouldn't be living here because this is all part of it.

Speaker 5 In this neighborhood, neighborhood, beware of the sand, man.

Speaker 5 But first, let's do the numbers.

Speaker 5 Dow Industrial is up 317 points on this Monday, three quarters of 1% finished at 42,515. The NASDAQ up 294 points.
That is 1.5% on that index, 19,701.

Speaker 5 The S ⁇ P 500 gained 56 points, 9 tenths percent, 6,033. Justin was talking about the steel industry.
Let's talk about them and some users.

Speaker 5 Charlotte, North Carolina-based New Core dipped 2 tenths of one percent. U.S.
Steel headquartered, as I said, in Pittsburgh, PA, soared 5% today. General Motors, they use a lot of steel.

Speaker 5 Based in Detroit, obviously ratcheted up one and three-tenths of 1% today.

Speaker 5 Carrier Corporation, HVAC refrigeration systems, that's what they do, based in Palm Beach Gardens, Florida, should you be curious. Cooled three tenths of 1%.

Speaker 5 Megan McCarty Carino was talking about the latest form of holiday creep.

Speaker 5 Some of the stores where this trend is most prevalent, Michaels and Hobby Lobby, they are privately held, but Target, where you can shop for a variety of holidays year-round on the holiday shop section of its website, just because.

Speaker 5 Racked up two-tenths, two and a tenth percent, rather. Bonds down, yield on the 10, you're T-note up 4.45%.
You're listening to Marketplace.

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Speaker 5 This is Marketplace. I'm Kai Rizdahl.
You fire up Netflix, you hear that ba-bum sound, and then what happens? You get the home screen, right?

Speaker 5 Well, for the first time in more than a decade, that Netflix home screen is getting a redesign.

Speaker 5 Among the changes, the movies and shows you see on it are going to change in real time, adapting to how you're browsing.

Speaker 5 You linger a little longer on that Adam Sandler rom-com trailer, and you're going to get more of the same, for better or for worse.

Speaker 5 The point is, whether it's Netflix or Disney Plus or HBO Max, that streaming homepage real estate is incredibly valuable.

Speaker 5 What titles you see, where you see them, how often you see them, all of that influences what you actually watch and who actually makes money from what you actually watch.

Speaker 5 Marketplace's Matt Levin is on it.

Speaker 2 Let's start at the top of your streaming home screen. That big poster-like image or autoplay clip that eats up like half your TV.
Netflix calls it a billboard.

Speaker 2 Other streamers call it the hero position. On Disney Plus, it's a rotating carousel.
And leading my Disney Plus carousel at the moment is a close-up of Elizabeth Moss in a white bonnet and red robe.

Speaker 30 The Handmaid's Tale series finale. This is there because it's the hottest piece of property that the Disney Empire currently has to stream.

Speaker 2 Ole Luchens was VP of product design at Disney Streaming for six years. I'm sharing my screen with him over Microsoft Teams.
He says the carousel is incredibly valuable real estate.

Speaker 30 It's the Saks Fifth Avenue,

Speaker 30 one of the five windows they decorate for every season.

Speaker 30 It's the big, beautiful display of the best stuff that we have to offer that that's supposed to draw you in.

Speaker 2 That's probably because audiences are more likely to watch the first big shiny show or movie they see after they log in.

Speaker 2 But the carousel is also subliminally seeding what you may want to watch in the future.

Speaker 30 There is the subconscious emotional knowledge that we're loading you up with that might pop up in your brain just as a behavioral moment, as a habit later.

Speaker 2 Most of what's in the Disney Plus carousel is content from Disney, stuff from Pixar or FX or Hulu, all of which Disney owns.

Speaker 2 But like most other streamers, Disney Plus also offers shows and movies they license from other film and TV companies. You just might have to search a little harder for those.

Speaker 31 The drama movies, you might find something of ours in there.

Speaker 2 Rashad Qasim is trying to find one of his company's movies in my Disney Plus home screen. It's taking a couple minutes.

Speaker 31 You see right at the front, these are all owned titles. Hulu, FX, Disney, Hulu, FX, Disney, Rinse and Repeat.
So they're really pushing that stuff forward.

Speaker 2 Cossum heads content licensing and strategy at Shout Studios. It owns the rights to films like the 90s Kiana Reeves thriller Point Break and the stop-motion classic Coraline.

Speaker 2 With ad-supported streaming services, Shout and a streamer split the revenue every time an ad is run before or during Shout titles, which is why Cossum tries to negotiate that his titles titles get a prominent position on a streamer's home screen.

Speaker 31 That placement, a hero placement like this at the top or like front and center in the first trays, that translates into a lot of money. Percentage-wise, it could be anywhere from a 25%

Speaker 31 to 50% boost.

Speaker 2 Cossum also tries to make sure that after you watch another action movie from the 90s or John Wick or some Bankheist movie, Point Break appears in one of those because you liked or recommended for Euros.

Speaker 2 but those placements are trickier.

Speaker 31 To paraphrase severance, the algorithm is mysterious and important.

Speaker 2 Nowhere is the algorithm more mysterious or important than the biggest, baddish streamer on the block, Netflix.

Speaker 18 Think of our job as trying to be an incredible matchmaker.

Speaker 2 Patrick Fleming is senior director of product at Netflix.

Speaker 18 And then when you click play, you sit back and you go, ah, that was the right one.

Speaker 2 While that carousel at Disney Plus is curated by human marketing teams, Netflix's home screen is heavily influenced by what the algorithm thinks you'll like based off your viewing history.

Speaker 2 The enemy for Fleming is decision fatigue. So to help you figure out what you want to watch when you don't really know what you want to watch, Netflix is piloting generative AI.

Speaker 18 So I'm typing in something if I am

Speaker 18 exhausted.

Speaker 2 Fleming is demonstrating Netflix's new AI natural language tool, now only on its mobile app. The underlying tech is the same as what powers ChatGPT.

Speaker 18 Okay, the first recommendation is Headspace Guide to Meditation.

Speaker 2 That's what popped up on Fleming's Netflix account. Wonder if my algorithm knows if I'm exhausted? I'd be more in the mood for point break.
I'm Matt Levin for Marketplace.

Speaker 5 You buy a house, and once you figure out that you can make your monthly payment and some extra for maintenance and the occasional repair, you might think you've got a good handle on home owning expenses.

Speaker 5 You, of course, do not, because there's always something. There's a guy in Michigan who knew from the very beginning that his experience with his home was going to be all about spending money.

Speaker 5 Michigan Public's Laura Weber Davis has this story of man versus sand.

Speaker 20 Silver Lake is about a mile from Lake Michigan, and all around are rolling sand dunes more than 100 feet high.

Speaker 20 People come from all over to enjoy the dunes at this state park, and sometimes they end up on Dan Beam's property.

Speaker 5 We say, you know, you have to stay off from the property, and they'll walk on the edge of the dune and say, well, you can't own a dune. And I'll say, yeah, but I do.

Speaker 20 Dan Dan owns the house right where the dunes meet the neighborhood. On a windy day, the dune blows in towards his cottage, sometimes by a foot or more.

Speaker 20 And he's been pushing the sucker back with a front-end loader for several years, with the help of a friend, Frank Pfaff.

Speaker 32 See, right now, the old sand machine's working pretty good right now.

Speaker 20 Does this kind of day give you heartburn?

Speaker 5 Yes.

Speaker 32 Yes.

Speaker 20 The dune is moving because of wind, yes, but it's also because there's a huge recreational dune buggy park here. The sand is never really allowed to settle.

Speaker 20 In fact, there's at least a handful of houses that have already been consumed by the sheer volume of sand. Dan bought this house in 2020, determined to do battle.

Speaker 33 If we didn't buy it, we didn't know if anybody else would.

Speaker 33 And that meant that this would be covered by a dune and that the two cottages that are next door, which are my mother's and mine, would be the next ones in line.

Speaker 20 That's right. Dan's family actually owns the first three cottages next to the dune.
He bought the house next to the dune to save the other two.

Speaker 20 This house was built some 30 years ago with a three-story observation tower to get a good view of Lake Michigan. But now the dunes are so high that the view is just sand.

Speaker 20 And that's where Frank and the front-end loader come in. He points towards the flat sand expanse in front of Dan's porch.

Speaker 32 My first goal is to make sure the house is safe. This year, the sand started about right here, and I've already taken that whole section.

Speaker 20 Frank fills a giant gravel train dump truck with sand and hauls it out, sometimes daily. They sell the stuff locally to construction sites, fracking operations, horse arenas.

Speaker 33 It also is good for sandbox sand, beaches.

Speaker 33 It's very pure sugar sand.

Speaker 20 They can haul away more than 1,500 semi-truckloads of sand a year. But this isn't like, you know, a profitable business.
Dan's hoping to break even for the first time this year.

Speaker 20 To him, this is all worth it. And he has reason to believe that he can save the house.

Speaker 34 We know that people tend to underestimate the likelihood of bad things happening to them.

Speaker 20 That's Jenny Schutz. She's an expert in housing policy and economy with Arnold Ventures.

Speaker 20 She says disaster-prone areas make the housing sector a vulnerable segment of the economy, particularly in the age of climate change.

Speaker 34 People move to wildfire-prone areas or hurricane-prone areas thinking it's not going going to hit my house.

Speaker 20 She says people want to live near cool, natural places.

Speaker 34 On beachfronts, near mountains with great views, in places that have warm winters and lots of sunshine. But those same amenities often are the risks that are going to harm people and housing.

Speaker 20 The thing with Dan Beam is he knows precisely the beast he's taken on. He successfully moved that dune back about 40 feet away from his house.
So why do this?

Speaker 20 Dan will tell you right away, it's for his family. Four generations enjoy these homes during the summer, and it's their favorite place to gather.

Speaker 20 Dan's mom, Dottie Myers, says sand is just part of the family.

Speaker 25 Yes, it is.

Speaker 25 You know, if you don't like sand, you shouldn't be living here because this is all part of it, part of our living experience.

Speaker 33 And our grandchildren absolutely love climbing the dunes. We do as well.

Speaker 20 It's kind of interesting. It's a bit of a love-hate relationship with that dune then.

Speaker 33 It is a love-hate relationship.

Speaker 20 And it's a relationship he hopes his kids and grandkids will be willing to keep up, even as the sand keeps rolling in. At Silver Lake State Park in Michigan, I'm Laura Weber Davis from Marketplace.

Speaker 5 This final note on the way out today, in which oil traders looked at the Iran-Israel war and said, yeah, it's bad and scary, but not as bad and scary as it was a couple of days ago.

Speaker 5 Brent crude, the global benchmark, fell today despite new attacks, down almost 2%, just shy of $73 a barrel, up obviously since the end of last week.

Speaker 5 Our daily production team includes Andy Corbin, Nicholas Guillong, Maria Hollenhorst, Iru Ekpinobi, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kylie Rizdahl.

Speaker 5 We will see you tomorrow, everybody.

Speaker 5 This is APM.

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Speaker 4 Prices may be higher in Hawaii, Alaska, and California, and for delivery.