Rate cut? So what?

This podcast is supported by Odoo.

Some say Odoo business management software is like fertilizer for businesses because the simple, efficient software promotes growth.

Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable.

And some describe Odoo's programs for manufacturing, accounting, and more as building blocks for creating a custom software suite.

So Odo is fertilizer, magic beanstock building blocks for business.

Odoo, exactly what businesses need.

Sign up at Odoo.com.

That's ODOO.com.

Recruitment.

In law, it can feel clinical, procedural, lacking the human element that defines the profession.

LHH believes it should be more.

By connecting legal talent to meaningful opportunities, not just matching skills to job descriptions.

Beautiful things happen in legal careers.

A mentor shapes a future.

A team argues, then aligns.

The associates you hire become the advocates you trust.

Making the thousands of hours in practice truly matter.

Recruitment, development, career transition.

LHH, a beautiful working world for the legal world.

Discover recruitment solutions today at lhh.com/slash beautiful.

What if we covered the Federal Reserve

differently, huh?

From American public media, this is Marketplace.

In Los Angeles, I'm Connor Rosnal.

It is Tuesday, today, the 23rd of September.

Good as always to have you along, everybody.

All right, so here's my idea.

Actually, the executive producer of this program thought of it, must give her credit where credit is due.

But you know, the NFL's red zone coverage where you pop in and out of games at key moments, touchdowns, turnovers, great plays, what have you.

That, but for coverage of the Federal Reserve.

There are 16, count them 16 speeches by officials from the central bank this week.

Obviously, we're not going to red zone them on you much though we may want to, but we are going to concentrate on two of them.

Chair Powell was up today.

He said, among other things, that there is no, and this is a quote, no risk-free path for the Fed to get inflation where it wants it to be, which basically means the job market's a risk factor, as are higher prices.

So there's that.

Brand new Fed Governor Stephen Myron spoke yesterday and argued, as he has during his time working directly for President Trump, that interest rates are just too high right now and said, again quoting, that the appropriate Fed funds rate is in the mid-2%

area, almost two percentage points lower than current policy.

End of quote.

It's unlikely at best that the other 11 voting members of the Federal Open Market Committee agree with Myron, but we're going going to do a little what-if here.

Marketplace Adjustin Ho looked into how things might play out.

What Governor Myron's talking about is a series of half-percentage point rate cuts over the course of the next few Fed meetings.

Guy Labas, chief fixed income strategist with Janny Montgomery Scott, says if that were to happen, the first place he'd see an effect is in government bond yields.

Two-year treasury yields might drop by, say, 1.5%.

Five-year Treasury yields might drop by, say, 1%.

And 10-year Treasury yields might drop by, say, half a percent.

LeBas says that drop tapers off for longer-term bonds because the Fed doesn't have as direct of an influence over them.

But either way, he says falling treasury yields would have a similar effect on a variety of loans.

On credit card borrowings, which would happen almost immediately.

They are tied to short-term interest rates, as are student loan borrowings.

And there would be less and more gradual an effect, but still a significant effect, on mortgage rates.

People would also earn less interest on their savings accounts.

LeBon says all of this would encourage more spending.

And that occurs both at the corporate level and also at the consumer level, which is a bigger portion of the overall economy.

And that spending might have some side effects.

The fear, of course, is what happens with inflation.

Winnie Caesar is global head of strategy at Credit Sites.

She says inflation is already higher than the Federal Reserve is comfortable with.

So if it rises more, then the Fed is having to talk about, well, maybe we've been a bit too accommodative in our policy, and it may be time to start hiking rates again.

Higher inflation would likely cause long-term bond yields to rise ahead of any Fed rate hikes.

Skanda Amarnath, executive director of the research group Employ America, says that's because investors would demand higher yields to reflect all of the risks.

Both risks that interest rates might have to rise in the future and also just that inflation itself might erode my returns.

Amarnath says that would push up the cost of mortgages, also corporate borrowing costs, meaning it's probably more challenging for businesses, for households to spend, whether that's on a house, whether that's in a new investment for a business, in a world of higher financing costs.

And that could cause the economy to slow down and unemployment to pick up.

I'm Justin Ho for Marketplace.

On Wall Street today, traders didn't really much care for things.

We will have the details when we do the numbers.

1.8% might not sound on first listen like great economic growth, but given

everything,

the forecast this morning from the Organization for Economic Cooperation and Development, Well, it ain't so bad.

But while the OECD does say that the U.S.

economy is holding up better than expected given President Trump's trade wars, the group also warned that next year it could be a different story.

Marketplaces Vanda Peters has that one.

With this small upward revision, the OECD is still forecasting a sharp slowdown in U.S.

growth compared to last year, but it's painting a picture of a sturdier economy than expected.

Given everything that's happened and everything that's changing and everything that's been introduced, Monica DeBole is a senior fellow with the Peterson Institute for International Economics, and you probably don't need me to explain that she's talking about first and foremost, the tariffs, and everything we don't know about how the trade war will play out, like how high the president will raise tariff rates, how long they'll stick around.

That uncertainty on its own is enough to sort of bounce the economy off the rails, though not immediately.

In the short term, that uncertainty might actually be buffering the U.S.

economy, says Dietrich Volrath, an economist at the University of Houston.

Because while corporate America waits for clarity, it's mostly absorbing the cost of tariffs rather than passing them along.

That's where the resilience may, you know, be fragile.

Fullrath says the deferral on price hikes can't last.

Plus, while companies are in this holding pattern.

It also means you're probably not building the new plant, right?

Or you're not expanding your product lines because you're not sure whether that'll be facing tariffs or not.

The OECD predicts the U.S.

economy will lose steam a lot faster in 2026.

But Darren Akamoglu, an economist at MIT, says some tariff effects might take even longer to play out.

Effects on investment, on which companies survive, which companies can expand, who is willing to take risks, what type of talent gets attracted to the right sector.

Those are all slow-moving things.

Akamoglu says the U.S.

will feel the true and full impacts in longer-term economic growth.

I'm Savannah Peters for Marketplace.

If you're in the market for a new or used electric vehicle, you'd best get a move on because the Biden-era federal tax credits for EVs go away on October the 1st.

We're talking thousands of dollars in credits, by the way, which the GOP and its tax cut law that was signed over the summer decided to end.

There has been, as you might imagine, quite the rush at car dealers the past few months as consumers tried to beat the clock.

But as Marketplace's Henrietta reports, given that this is all about taxes and the Internal Revenue Service, nothing is as straightforward as it might appear.

Ever since the GOP gave buyers less than three months to get the tax credit, business has been booming for car dealers who specialize in electric vehicles.

July, August, September have all been just tremendous months.

I'm getting five times the normal traffic.

Best month ever.

We helped 69 families go electric in our communities.

I mean, it's been a very steady stream of super busy.

That's Alex Lawrence in Utah, Jesse Lohr in New Hampshire, Dan L.

Duehe in Massachusetts, and John Foley in Virginia.

All of them run dealerships that sell used electric vehicles.

Those are eligible for a $4,000 federal tax credit if they sell for under $25,000.

And ever since January of 2024, buyers have been able to claim that credit at the point of sale.

So instead of waiting until they file their taxes, they can apply it to the cost of the car up front.

And the federal government sends the funds straight to the dealer.

Scott Case, the CEO of Recurrent, a company that keeps track of the EV market, says until recently, this system worked pretty seamlessly.

The dealer makes a sale, uploads the information into the IRS portal, and within a couple of days, they get paid out from Treasury.

But a week and a half ago, Case and all of those dealers you heard a minute ago say that process changed without warning.

First, the IRS portal suddenly required new information for each sale.

That included a photo of the proof of purchase document held up next to the vehicle identification number in the door jamb of the car.

You kind of have to do it in a proof-of-life style picture.

And then dealers say the IRS started marking every sale they submitted as pending.

Rather than getting accepted and processed and then paid out in a timely way, they're all getting sort of like by default shifted into this pending status.

That means dealers are unsure when they'll get reimbursed for the thousands of dollars they're passing on to customers for each EV sale.

Some are fearing they might not see the money for months or at all, and they're really frustrated.

Alex Lawrence runs EV Auto, a dealership with locations in Utah and Tennessee.

Now we're being asked to do all these things during the last two weeks of the credit when it's going to be the craziest and the busiest.

What a horrible time to change your process.

An IRS spokesperson did not respond to requests for comment in time for our deadline.

Meanwhile, dealers are weighing just how many more tax credit eligible cars they're willing to sell.

I'm pretty sure I'll get reimbursed, but how long it takes, that's the question.

Dan Eldawayhe is owner of 1A Auto Sales outside of Boston.

He plans to cut off sales when the IRS owes him $100,000 worth of tax credits.

When we spoke on Monday, he had four cars to go.

It's our livelihood, too.

So, you know, if there's $100,000 I have to chase for six months, that's not easy for anyone.

If the tax credit payments don't come through soon, Jesse Lohr, who runs Greenwave Electric Vehicles in Northampton, New Hampshire, is worried about a cash crunch.

$4,000 is a lot of money.

It is higher, larger than the profit margin that we make on any one of these vehicles.

He buys his inventory of used EVs using a line of credit, which he needs to repay every time he sells a car.

But if that federal money doesn't come through, it goes from being a sale that helps us continue our work and our mission to a sale that costs us money to complete.

Meanwhile, in the tax credit's final days, John Foley, owner of Recharged in Richmond, Virginia, plans to sell as many cars as he can.

Is it frustrating that I'm going to have to rely on like the IRS to make good on all of this?

Yes, but

I think that's just a risk I'm willing to take.

In part, he says, because he thinks his business will keep thriving after September 30th, because all of the new EVs EVs sold over the past few years mean the supply of used EVs will stay strong.

I'm Henry App for Marketplace.

If you're a renter, house, or apartment, how long have you been there?

According to Redfin, the most common answers fall somewhere in the one to four year range.

Thing is, though, depending on your job, you might be moving way more often.

That's the setup for today's installment of our series, Adventures in Housing.

My name is Stephanie Fraker.

I'm a travel nurse currently working in Maine, but my permanent home is Horseshoe, North Carolina.

It's been about seven years now since I started doing travel nursing and

we have been to and worked in Washington State, California, Arizona, Wisconsin, Ohio, North and South Carolina, Maine and New Hampshire, and Guam.

I think that's everything.

I live and travel with my husband and our two sons.

They are nine and six-year-old boys.

My husband does homeschool the kids.

He takes the lead on that.

I do a little bit.

I'm the art teacher, basically.

As soon as I'm looking at what's available and where I could apply is when I start looking at what housing is available in those locations.

I don't want to apply for a job in a place where I can, you know, just on initial searches tell it's going to be impossible to find a place that's reasonable to rent, you know, has room for for me and the family and the dog.

I didn't mention we have a dog too, so it has to be dog friendly.

We, you know, we don't have the newest, most expensive phones and all that.

We do a lot of thrift shopping and hand-me-downs from cousins in order to be able to live the way we do.

There's definitely places we've gone where it's not like we're trying to save as much money as we can.

I mean, like when we went to Guam, it's going to be more expensive, but in general, maybe like a week of pay for the rent is kind of a goal that we go for.

Obviously, we definitely go over that many times.

Right now we're in Maine and it is an old farmhouse on a horse farm.

So the owners live kind of on one half and then we're on the other side.

And the cool thing is that there are eight horses boarding.

There's chickens, goats, they have some ducks.

So it's really great for the kids kind of getting involved a little bit with taking care of the animals and doing some of the farm stuff

everywhere we go and all the different people we're able to meet, all the different stuff we can do as part of their education, really.

You know, I hope it makes them really well-rounded and just empathetic and appreciate how different people live.

Travel nurse Stephanie Fraker, Maine, right now, North Carolina, more permanently.

Share your housing journey with us, would you?

Whether you're moving around or firmly rooted, we want to hear about it.

Marketplace.org/slash adventures in housing.

Coming up.

Like, just don't think AI solves everything.

Not yet.

Well, yes, true, but has artificial intelligence met President Trump's tariffs?

First, though, let's do the numbers.

Dow Industrials off 88 points today, two-tenths percent, 46,292.

The NASDAQ subtracted 215 points.

That is just shy of 1%,

22,573.

The SP 500 down 36 points, a bit over half a percent, 66, and 56.

Tylenol maker Kenview up one and six tenths percent today.

I'm just going to assume you know why we're talking about them.

Some good news for Boeing: Uzbekistan Airways has reportedly signed a deal to buy $8 billion worth of Boeing airplanes.

Turkey's president Erdogan reportedly plans to buy a whole bunch too.

The Plane Maker climbed 2%.

AutoZone reported quarterly earnings that missed expectations.

Shares closed flat.

Bonds up.

Yield on the 10-year T-note fell 4.11%.

You're listening to Marketplace.

This podcast is supported by Odo.

Some say Odo business management software is like fertilizer for businesses because the simple, efficient software promotes growth.

Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable.

And some describe Odo's programs for manufacturing, accounting, and more as building blocks for creating a custom software suite.

So Odoo is fertilizer, magic beanstock building blocks for business.

Odo, exactly what businesses need.

Sign up at odoo.com.

That's odoo.com.

This marketplace podcast is sponsored by the University of Illinois Geese College of Business.

For many, the next step in their career is an MBA, but finding the time and budget can be a challenge.

The University of Illinois Geese College of Business offers their online MBA, the IMBA.

It's fully online, flexible, and delivered at a fraction of the cost of a traditional MBA.

Students get the same world-class Illinois faculty and an interactive global network all designed to fit their lives.

To learn more about the Geese IMBA, visit online MBA.illinois.edu.

That's onlinemba.illinois.edu.

Fifth Third Bank's commercial payments are fast and efficient, but they're not just fast and efficient.

They're also powered by the latest in payments technology built to evolve with your business.

Fifth Third Bank has the big bank muscle to handle payments for businesses of any size, but they also have the FinTech hustle that got them named one of America's most innovative companies by Fortune magazine.

Big bank muscle, FinTech Hustle.

That's how Fifth Third brings you the best of all worlds, going above and beyond the expected, handling over $17 trillion in payments each year with zero friction.

They've been doing it that way for 167 years, but they also never stop looking to the future to take their commercial payments two steps ahead of tomorrow, constantly evolving to suit the ever-changing needs of your business.

That's what being a fifth-third better is all about.

It's about not being just one thing, but many things for our customers.

Big bank muscle, fintech hustle.

That's your commercial payments, a fifth-third better.

This is Marketplace.

I'm Kai Rizdahl.

It was the internet tells me, early department store magnate John Wanamaker, who famously said, half the money money I spend on advertising is wasted.

Trouble is, I don't know which half.

Yet here we are more than a century later and retailers are still trying to figure it out.

Exhibit A for us today is Best Buy.

The company is making a push to get more advertising inside its physical stores because it turns out selling ads is generally much more lucrative than selling stuff.

So a lot of retailers have of late styled themselves as media networks.

The most successful, by far, Amazon, of course, and that's what most others have been trying to imitate, selling banner ads or sponsored search results on their websites.

But hardcore big-box retailers like Best Buy have a whole lot of actual real estate in store, too, and they're not about to let that go to waste, as Marketplace Megan McCarty-Carino explains.

Stores have been selling advertising for decades, but it's generally been pretty analog, says Kuhn-Powles, a professor of marketing at Northeastern University.

What goes right at the checkout counter where you're waiting and you can impulsively grab something?

Very often that's held by manufacturers, by brands.

Now, stores are looking to replicate what they've done online, but in real life, where consumers still make 80% of their purchases, says analyst Sarah Marzano at eMarketer.

So there's this massive potential that really hasn't been effectively tapped into.

The potential for ads that literally follow you around, like in the science fiction film Minority Report.

It depicts a barrage of personalized billboards and virtual shopping assistants at every turn.

Hello, Mr.

Yakamoto.

Welcome back to the gap.

How those assorted tank tops work out for you?

Retailers aren't scanning our retinas yet, but they are getting more sophisticated at tracking how effective ads are in store, says Ben Reynolds at digital signage company StrataCash.

We have a sensor at every screen, and we use a millimeter wave sensor to see that, yes, this person was in front of the screen, and then they also made a transaction.

Serving ads can be more costly in person than online because retailers need hardware to display them, potentially in thousands of locations.

Best Buy already has plenty of that, notes Kirti Kalyanam, a retail management professor at Santa Clara University.

You can provide a very high-quality saran sound experience for the customer right from the door.

Best Buy says it will be offering store takeovers, blanketing the space with ads for a single brand.

That, Kalyanam says, is much harder to ignore than the cluttered banner ads on a webpage.

I'm Megan McCarty-Carino for Marketplace.

It's not like tariffs are a new thing in this economy.

They have been around literally as long as there has been an American economy.

That said, the dysregulated way in which the Trump administration has been using them these past eight months is putting unprecedented strain on businesses, big and small.

What gets tariffed, at what rate, and from which countries, has turned into a giant game of economic fill-in-the-blank.

Wouldn't it be great then if there was a technology that could help, that could take chaotic and unpredictable inputs, and, fingers crossed, come up with a viable business solution?

Marketplace's Sabri Benishore has more now on how artificial intelligence might help those businesses figure it all out.

If there is anywhere in this economy where AI could clean up a mess, it is tariffs.

Getting a product into the U.S.

was already complicated before President Trump piled on even more import taxes.

Every single product that is imported gets classified into one of around 20,000 tariff codes.

Todd Smith is CEO of KYG Trade, which produces AI trade software.

Every product has a tariff code, and the government has had a book of them since 1989.

It is 4,400 pages long.

You can look up the tariff on MRI machines, usually zero.

Basmati Rice has a tariff of 38 cents a pound, but not if it's from Jordan or a few other countries, then it's different.

Sometimes it's hard to tell which category your product even falls into.

A smartwatch can get classified as, you know, watches, it can get classified as computer equipment or even a medical device.

Priya Raj Gopalan is with Forkites, which helps companies use AI to manage supply chains.

On top of all of the existing tariffs came all of President Trump's tariffs.

Importers and manufacturers have to know where a product is actually even from.

Sounds easy, but it's not.

Janae Seco is CEO of Copper Hill, a customs consultancy that's created its own AI-powered trade software.

A manufacturer in Mexico can't, you know, import

everything from China, for example, repackage it and call it Mexican origin.

That doesn't work.

So companies are having to look at where their products are from and where their parts are from, but also where the parts of their parts are from.

Priya Raj Goplan with Forkheits.

Electronics is, of course, a classic example of where the bomb, as they call it, the bill of materials, truly explodes with hundreds of components.

Right.

And each of those have many, many vendors behind them.

The crazy thing is, a lot of companies traditionally figure this all out, but just not very efficiently.

Again, Todd Smith with KYG Trade.

A lot of that work is done by passing unstructured PDFs, emails, Excel sheets via emails up and down the supply chain to suppliers and consultants.

That is one place where AI enters the picture.

And with AI, we're able to now ingest all of this unstructured data and make sense of it really fast.

In some cases, AI can identify a product and its tariff with just a photo.

AI is also helping manage the sheer volume of tariff problems.

Up until recently, packages worth less than $800 didn't get tariffed.

Now they do.

About 4 million of those so-called de minimis packages arrive in the U.S.

a day.

Now they get taxed.

Janae Seco with Copper Hill.

Let's say a company had 20,000 imports a year, but with the de minimis change has 30,000.

It makes, it definitely creates more efficiency for that to be more manageable.

Now that almost every country has a new tariff, a lot of them different, on top of old tariff rules, supply chains have become a lot more difficult to figure out.

AI is helping there too.

What we are seeing is supply chains around the globe reconfiguring themselves right in front of our eyes.

Madhav Durbha is with Relux Solutions, which uses AI to manage supply chains.

For all the glittering new AIs, it's the old-fashioned AIs, machine learning, just very smart, mathy software that's doing a lot of the heavy lifting, calculating the best source with the best price and the best tariff for thousands of products on a shelf.

Like imagine a big box store trying to redo its supply chains.

They carry anywhere from 20,000 to 100,000 items or so in any single store, right?

When you think about the number of stores and number of item combinations, it could potentially be tens or even hundreds of millions.

All that said, humans are still necessary for now to make decisions, to double-check, to point the AI in the right direction.

Janae Siko with Copper Hill.

Like, just don't think AI solves everything.

Not yet.

It is not some magic sauce.

But in the new age of tariffs, it is doing some magic.

In New York, I'm Tabri Benishore for Marketplace.

All right, we got to go.

Too much talking, not enough time for a final today.

Jordan Manjis, Onil Maharaj, Janet Wynne, Olga Oxman, Virginia K.

Smith, and Tony Wagner are the digital team.

I'm Kyle Riznal.

We will see you tomorrow, everybody.

This is APM.

Let's be honest, most HR platforms aren't exactly a joy to use.

Deal's different.

It's AI native, keeps you compliant, and grows with your team, whether you're five people or thousand.

HR, IT, and payroll on one platform that just works.

See for yourself at DEEL dot com/slash serious.