Marketplace - Fed officials speak up on inflation

Episode Date: September 24, 2026

As Federal Reserve Chairman Kevin Warsh attempts to limit forward guidance, analysts are zeroed in on other Fed officials’ public comments. Turns out, they’ve got plenty to say. In this episode, central bankers make their voices heard. Plus: Layoffs push workers to pivot careers entirely, catastrophe modelers warn a strong El Niño is brewing, and potato farmers struggle in the wake of an excellent growing season.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:Kevin Warsh is against forward guidance. But that hasn't stopped other Fed officialsLaid off? Odds are a change of job title's in your futureA "historic" El Niño is brewing and catastrophe modelers are mapping out the risksA spectacular 2025 growing season was not so great for potato farmers this year

Want to know what the Fed is thinking about interest rates in the economy? Some officials are more open than others. From American Public Media, this is Marketplace. In Denver, I'm Amy Scott in for Kai Risdahl. It's Thursday, September 24th. Good to have you with us. If you've been listening to this show so far in the Kevin Warsh era of the Federal Reserve, you know that the current Fed chairman likes to hold his cards close to the vest.

He's been clear he thinks Fed officials have tipped their hands too much in the past about their future plans for interest rates. In Fed speak, this is known as forward guidance. But Warsh hasn't been able to keep everybody else quiet, especially this week. Marketplace's Nancy Marshall-Genzor starts us off with more on what other Fed officials have been saying and why it matters. Just two days after the Federal Reserve's meeting last week where officials voted to raise interest rates, Kansas City Fed President Jeff Schmidt said the Fed has work to do on inflation. Then yesterday, Fed Governor Michael Barr said this. Inflation is above our 2% target and not clearly trending toward target in a timely way.

We heard from several more Fed officials today, including New York Fed President John Williams. He said it's reasonable to think another rate hike may be appropriate by the end of the year. Danielle DiMartino Booth, CEO at QI Research, is not something. surprised by the cavalcade of Fed chatter. There is no corraling Fed speakers, none, zero Zippo. DeMartino Booth says some Fed officials are openly advocating for a rate hike. Others want to see how upcoming inflation data plays out. Sarah Binder, senior fellow at the Brookings Institution, says all these comments from people

at the Fed can smooth the way for future interest rate decisions. That's how the Fed moves interest rates. It's through transparency, communication. nationwide financial market economist Orrin Clatchkin says these Fed speakers realize they can no longer act as though inflation caused by high oil prices and tariffs is temporary. We're facing more and more of these supply side shocks that are not just these kind of one-off things and that they're also lasting for longer. Clatchkin says last week's interest rate hike may not be enough to cool the economy and beat back inflation. He expects two more rate increases this year. I'm Nancy Marshall Ginser for Marketplace.

On Wall Street today, more drama in the bond market. We'll have the details when we do the numbers. The number of people filing for first-time unemployment benefits fell last week. Another sign that the job market is holding up pretty well overall. The Labor Department said today the four-week average fell to just over 202,000 near 50-year lows. And we'll get more data on layoffs early next week when, the job openings and labor turnover or joltz survey comes out for August. When people do get laid off, odds are they're switching to an entirely different job. That's according to the Career Transition

Company LHH, which tracked more than 400,000 layoffs and found that 58% of those workers moved into different jobs or even industries. That percentage hasn't changed much over the past few years. What has changed is why. Marketplaces Kaylee Wells walks us through the findings. Once upon a time, as in the mid-20th century, the job market was more centered around manufacturing and construction. So it was more cyclical, says Guy Berger, with the Burning Glass Institute. And so you have these layoffs, and then eventually the inventories roll down, and you start producing stuff again. People get recalled back to work. He says by the 1990s, that cyclical job market was pretty much gone. And so now...

You have these permanent layouts where, like, you lose a job, and the job's gone. So more often, unemployed people have to find something different. Today, careers they are most likely to leave include customer service, logistics, and office support. It's largely due to the digital transformation that companies are going through and a lot of the AI disruption. John Morgan is president of LHH, which released the report. He says not all of the disruption is because of AI. We've been walking into Panera and ordering sandwiches on tablets for a while now. We've had chatbots on websites for a long time.

We've had a lot of workflows being automated by robots for a long time. Many of the roles that workers abandon are what Michelle Evermore, with the National Employment Law Project, calls foot-in-the-door jobs. Where you actually may be seeing people transferring to something more consequential. Evermore says leaving an office assistant job isn't bad news when it means getting promoted to, say, project man. I'm Kaylee Wells for Marketplace. Sales of new homes hit an eight-month high last month as home builders offered incentives

like interest rate buy downs to attract buyers. Still, sales were down 2% from August of 2025. And as we heard yesterday from Marketplace's Sabree Beneshire, the recent rise in mortgage interest rates is likely to depress home sales and building. Fresh data from Freddie Mac today put the recent average interest rate on a 30-year fixed at 7.03%. But there is no one housing market in this big, diverse country. So for a view from the ground, we called up one of our real estate regulars. Letitia Grant is executive managing broker with Tass Realty Group. Good to talk with you again,

Leticia. Of course, as always, it's my pleasure. All right. So how would you describe the Houston housing market right now? If I had to pick one word, Amy, this time, I'm going to use the word unstable. We are doing a little bit of everything. In some areas, I would say buyers market. In some areas, I would say sellers market. Huh. So it really varies neighborhood by neighborhood like that?

It's price point by price point. So not necessarily neighborhood. It's definitely, you know, the price point that's making the biggest impact on how we feel about the market right now. Hmm. Okay. Well, say more about that. Where are you seeing a buyer's market and where are you seeing a seller's market? So I will tell you a good example. We just submitted an offer. I showed a property over the weekend that was on the market for five days. And we submitted an offer on Monday. We went in. They came back and they provided us with the invitation to submit a new offer. By the time we got it over, they had received and accepted another offer. Oh, no. I know my poor buyer. But this price point is in the mid-200 and it's not an affordable housing property. So it just kind of went pretty quick.

So that's an example of a house that is not big A affordable, but attainable. There's more demand there. Yes, absolutely. Absolutely. And I think, you know, of course, I would say interest rates probably pay a big role because people are buying beneath their affordability just so that they can. sure that they can afford the property, it's attainable. So where are you seeing buyers have more power? Ironically enough, with the builders. We have many of the builders that are coming in and they are reducing price points. So we have a builder that's building two bedroom homes. There is just in the demand for it. But the price point's not driving it. They reduce the price under $200,000. So we have in South Houston, builders that have properties and not far from downtown. So, you know, not extremely outside of our range, but they are under $200,000 and they just reduced it, say, in the low $190.

Wow. So is Houston a market where there still are the proverbial starter homes? It's still possible for first-time buyers to get in for a relatively reasonable price? Absolutely. We still have those starter homes. And if you're, you know, very low, low or moderate income, we still have down payment assistance that exist. If you're willing to go out just a little bit outside of that popular area, you can definitely still get what Texas and what Houston is known for those low price point properties. So I know people were kind of hoping that the market would pick up in the spring. summer and with interest rates staying high, there hasn't been as much volume nationally. But what do you see in Houston? Or how would you say the kind of busy, typically busy spring and summer selling market

turned out? Yeah, the typical busy spring and summer market really didn't hit us the way that we had anticipated or the way that it had historically. I do believe that, now I believe next summer in spring or spring and summer is going to look a lot nicer because we are seeing buyers coming back to the market. They're just trying to find their groove, so to speak. You know, where's their sweet spot to be able to purchase? But, yeah, I would agree.

We didn't see the influx of buyers that we thought we were going to. But we do see them entering back into the market. Hmm. Well, I feel like you're always an optimist when we talk. What's giving you more... Is that fair? I would agree. I would agree.

What's giving you hope about... next year. What do you think could change to, I don't know if normal's the right word. What do you think could change? Well, I'm just, just to be honest, you know, people, we always need a place to leave. That's the one thing that will never change. So with that being said, I think it's just taking everyone a little bit of time to settle into our new reality. As soon as that happens, the sooner it's the better off. We are as real estate professionals, but just kind of educating more, our communities more, about what it means and how do you overcome. That's one of the reasons that I'm extremely optimistic. In addition to that, you know, being located here in Houston, we just have so many different affordable opportunities,

such as down payment assistance. So those are probably the reasons. Letitia Grant is at Task Realty Group. She's the executive managing broker there. Thanks, as always, really good to have you on. Always a pleasure. Thank you again. Coming up. They want a perfect potato. And who can blame them, really? But first, let's do the numbers.

The Dow Jones Industrial Average lost 161 points, 3 tenths percent, to close of 51,349. The NASDAQ added three points, essentially flat to finish its 26. 939 and the S&P 500 lost just one point. Also, we'll call it flat, to end at 7704. Starbucks is set to close 250 underperforming stores in North America, which represent about 1% of its stores in the region. Starbucks shares fell half a percent. Bonds fell. The yield on

10-year T-note rose to 5.21 percent, the highest since 2007. You're listening to Marketplace. This is Marketplace. I'm Amy Scott. As you have no doubt heard by now, we're on the cusp of what's shaping up to be a super El Nino, an extreme version of a weather pattern that occurs every few years, during which warm water in the Pacific Ocean gets pushed towards the West Coast, often resulting in heavy rainfall throughout the southern U.S. and warmer, drier conditions in the north. The potential damage, which could include extensive flooding, is of interest to people like Dan Ward. He's the Senior Director of Model Development at Karen Clark & Company, a catastrophe modeling firm that helps insurance companies manage their risk. Dan, good to talk with you again.

Thanks for having me. All right, so we will get to the potential super El Nino we're facing. But first, can you talk about how you and your colleagues usually factor in El Nino when it happens? Sure, yeah. So when we are developing our catastrophe models, we are building models of hypothetical scenarios. And so in that context, we're actually looking ahead to future years, or in one way of thinking about it is many, many iterations of what next year could look like. And if that's going to be an El Nino year, then on average we might expect, say, fewer hurricanes in the Atlantic and more hurricanes

in the Pacific. But that doesn't tell us what the loss is going to be in a particular year, because that depends on not just the frequency of events, but also, where they happen. And you can have one really bad event in a year that causes a huge amount of loss, even if it was to an atmospheric scientist, a very quiet year. So as we said in the lead, this is looking like it's going to be a pretty strong El Nino. I guess super isn't a technical term, but that's what folks are calling it. What is your outlook for potential damage? Well, it depends on what region of the globe we're talking about. So during an El Nino and a particularly strong, strong El Nino like the one that is occurring right now. A lot of the activity, in a sense,

shifts toward the Pacific where we've seen a lot more hurricanes and typhoons, as they call them, in the Western Pacific, impacting places like Japan and China. And we've even had a couple hurricanes, you know, passed very close to the Hawaiian Islands, which is quite unusual. Wow. Well, many of the regions that are likely to be affected have had some pullback from insurance companies in recent years. I'm thinking of California where more and more people are on the state's fair plan because they struggled to get private insurance. Could that affect how these communities and individual homeowners are able to respond if there's a lot of flooding or storms? Yes, absolutely. And there's a lot of different reasons why insurance companies have

been pulling out of California in some ways. And it does, affect people's ability to get coverage for perils like wildfire, for example. The somewhat good news, unless you'd call it good news, but during an El Nino year, we actually expect to see more rainfall and potential for flooding in a place like California. And so this can actually, depending on the timing of that rainfall, can actually cut short the wildfire season, but at the same time, maybe increasing the risk from flood. Yeah, and I read recently that in California, very few homeowners actually have have flood insurance, which seems especially dangerous in the Super El Nino year.

Yes, it is, but this is typical across the United States. So if you own a home, you are going to be insured against damage from things like wildfires and things like wind damage from hurricanes or strong thunderstorms, but not against flood. In order to be protected against flood, generally you're going to need to have separate flood insurance. And so, It's usually only homeowners that live in very susceptible and vulnerable areas that are going to purchase that extra flood insurance and get that extra cover. So only a small percentage of U.S. homeowners actually have flood protection. So none of this has really materialized yet. But what are you going to be watching for in the coming weeks and months?

Well, in the short term, I'm still actually watching the Atlantic. You know, we're getting toward the second half of the season now and focus particularly on the West Caribbean Sea in the Gulf of Mexico where we expect to see more activity in the later half of the hurricane season here in the Atlantic. And then even longer term, I'm thinking about next year already and what's going to happen. Are we going to see El Nino transition into a potentially a strong Lanino, which can happen after a strong El Nino? Not every time, but it can happen. So we're thinking about that already. And what does a L'Anenia mean for? what you're following.

In a lot of the ways, in a lot of ways, it's opposite of El Nino. So instead of fewer hurricanes in the Atlantic, we expect more hurricanes in the Atlantic during Alinania and sometimes reduced activity in areas of the Pacific. So in some ways, it's kind of the opposite. So as someone who's, you know, constantly watching storms, I actually sat with you as Hurricane Ian made landfall in Florida a few years ago. Are you kind of unfazed at this point when you see these things coming? Well, every storm is actually unique in a way.

And so every event is a little bit different. And the way we approach it has to be a little bit different. So I would say that we have all the tools at our disposal to do what we need to do, to simulate the event and to estimate the impacts on the insurance industry. But also there's still that variety. every storm is different. All right. Well, Dan Ward, it's good to talk to you again. He's the senior director of model development at Karen Clark and Company.

Thanks so much. Thanks, Amy. We did a deep dive on catastrophe modeling and insurance a few years back on our climate podcast, How We Survive, including that story of tracking Hurricane Ian. Check it out at Marketplace.org or your favorite podcast platform. A wetter, fall, and winter would be welcome news for a lot of farmers in the American West after facing extreme drought and record-setting temperatures this year. Last year wasn't so bad, though.

In fact, the 2025 growing season was particularly good for one staple crop, potatoes. But as Colorado Public Radio's Dan Boyes tells us, sometimes you can have too much of a good thing. Bob Matibi married into a potato family. He moved to Colorado's San Luis Valley in the 80s. So we dig in the fields every day. My son is a night. He reaches into rich, dark earth and pulls out a cluster of small golden

columbah potatoes, one of about a half dozen varieties he farms. Idaho is the undisputed heavyweight champion of potato production in the U.S. but Colorado is no slouch. The state ranks second nationwide when it comes to a specific market, the fresh market. The potatoes you buy in the produce section at the grocery store. The distinction is we don't have any processing per se.

We don't make French fries or potato chips. Ours all go to retail establishments, restaurants, things like that. But this year it's been more complicated. Because this is one of the worst price years. I think I've probably experienced in my 40-plus years. With 2025's potato weather being so ideal all across the country, farmers grew way too many and potato prices have tanked. A semi-truckload of russets rolls up to Skyline Potato Company here in the Valley.

They dump out onto this line of machines that sorts them by size and sifts out rocks. Worker Joe Mondragon is on the line too, picking out the occasional spud to pluck what looked like roots. Oh, we're just taking up the sprouts where they've started a girl. They start getting sprouty when they get little old. These potatoes have been in storage bins for months. Skyline is a middleman company between the farmer and the grocery store. Les Alderetti is the manager. We wash them, grade them, put them in cartons for the consumers.

This truckload of potatoes is totally fine. They're a little small, maybe misshapen, Just as edible, they're not going to a grocery store. A grocery store won't buy them because when there's an oversupply... They want a perfect potato. Perfect size, perfect shape, and for a rock bottom price, thank you very much. There's almost no demand for this truckload of small lumpy potatoes. Alderetti says he's had to be especially nimble this year,

making new agreements with out-of-state processors, getting them to take a little more of the stock to make potato salad or something like that. It's helped us get the product moved. The growers still getting a little bit, not much, but he's not having to pay to have it hauled off somewhere. Farmers also send some of these unwanted potatoes to help feed cows. They donate to food banks. But at some point, there's still just too many. So this year, an abnormally high percentage of them have been destroyed, dried out,

broken up and buried. It's a last resort, and it's hard to know how many, though local estimates put it at 100 million pounds of potatoes across the valley destroyed. So we do a flyover to count acres, get a rough estimate. There is a strange silver lining in this tater tail. This year's drought across the west has not been good for potato production. Bob Matibi says farmers have planted. fewer acres. So we're hoping that that will be good for the market. So we won't be over supplying

the market and have another bad price year. If prices get back to what the farmers are used to, of course that's good for them, though it also means the spuds you buy in the produce section might not be so perfectly shaped. In Colorado's San Luis Valley, I'm Dan Boyce for Marketplace. This final note on the way out today, it's the time of year when Spirit Halloween stores are popping up in strip malls and vacant storefronts all over the country. And there are lots of vacancies to fill after some big retail bankruptcies. Axios found that the most common previous occupant of a Spirit Halloween was Joanne Fabrics, the beloved by many craft chain that went out of business last year. 153 of the stores, analyzed by Axios, were former Joanne's locations. Big Lots came in second with 103, and former Spirit competitor Party City was close behind at 100 stores.

And if you think it's too early to be shopping for Halloween, clearly you don't have a 12-year-old in your house. Group costume already locked in and ordered. Our daily production team includes Andy Corbyn, Mika Ellison, Maria Hollenhorst. Sarah Leeson, Sean McHenry, and Sophia Terrenzio. Will Story is the supervising senior producer. I'm Amy Scott. Hope to see you back here tomorrow. This is APM.