Marketplace - High inflation or ... high inflation?

Episode Date: June 24, 2026

When the U.S. launched a war against Iran, some Wall Street traders bet the ensuing energy shortages would push inflation up. Now that a ceasefire has brought down gas prices, the narrative has shifted: What if cheaper gas fires up the economy too much? In this episode, the markets are betting on inflation, whichever way you slice it. Plus: Prospective buyers struggle to secure mortgages on homes worth less than $100,000, local getaways anticipate healthy summer vacation demand, and direct-to-consumer brands reframe their environmental commitments.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: Whether oil prices are high or low, Wall Street is betting on inflationThe housing bill that might make small mortgages easierWith summer travelers facing higher costs, local vacation spots are thrivingWhy one direct-to-consumer brand is shifting its messagingBeekeeper turned business owner is growing into newer, bigger spaces

There's a lot going on right now. Mounting economic inequality, threats to democracy, environmental disaster, the sour stench of chaos in the air. I'm Brooke Gladstone, host of WNYC's On the Media. Want to understand the reasons and the meanings of the narratives that led us here and maybe how to head them off at the past? That's on the media's specialty. Take a listen wherever you get your podcasts. The program today, honestly, It's all about you.

From American public media. This is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Wednesday, today, the 24th day of June. Good as always, to have you along, everybody. We've got some data coming this week. May inflation in the form of the personal consumption expenditures price index. That is tomorrow.

And then on Friday, the University of Michigan's Index of Consumer Sentiment. And that, which is to say consumers, which is to say, us is where we are going to start with Heather Long. She's the chief economist at Navy Federal Credit Union, also one of our Friday regulars. Hi, Heather. Hi, Kai. Glad to be back. So look, somebody wakes you up at 2 o'clock in the morning from a dead sleep and says,

Heather, what is the mood of the American consumer? And without having a chance to check any of your data, what would you say? Well, I think after I maybe sock them, I would probably say the mood is still really gloomy. And I think the big thing that's going on that people are missing is while a lot of the consumption data still looks pretty darn robust, there's this massive psychological tax on the middle class right now where they feel and they have to financially make every dollar stretch to the furthest possible. And that's why the sentiment is so low. It's this, I got to find the cheapest gas station in town. I need to reset my thermostat so my electric bill isn't soaring again.

And I need to shift my spending from the nice grocery store to the warehouse or the discount store. It's that pressure people feel to be able to even do what they were doing without much thought a few years ago. Okay. So now I'm going to let you dig into your knowledge of the data that you guys have at Navy Federal. And what are we seeing consumers stopping doing and starting doing. You went over some of them, but clearly consumers are still spending, but I guess the point is they're changing the way they're spending and what they're spending on. Exactly. It's a big shift that's going on under the surface. I want to be clear, this is for the middle class. Right. Right. Right. The top 20% earning $170,000 above, they're fine. They are

spend, spend, spend, whatever. This is really folks in the middle. And what's really apparent is two big trends. Number one, this value and discount hunting, so this massive shift to spending at places like Costco and Sam's Club. And the second trend that's going on, a lot less spending on the home, so whether it's home furnishings or gardening, and because people are still want to prioritize entertainment spending, and they want to do, go to that concert or go to that World Cup, maybe That's a little bit too much of a stretch, but they want to be part of those one-time splurge experiences still. All right. So what happens then when the changing spending patterns of that middle class and the lower end of the income spectrum are so separated from those at the top end, right?

The top end is buying and spending whatever they want. But what are the – what's going to happen in a year and a half if it keeps going like this, I guess is my question. Yeah, it's a great question. I mean, in a lot of ways, the economy has been like this for a while with the top 20% driving a lot of consumption. But I think what's different now is the reality of the affordability crisis, particularly with cost of housing, cost of car ownership. Those aren't coming back down. And now we got the electricity pressures that are rising for a lot of people. And so I think what's my crystal ball, always tricky, but the crystal ball is.

it's inevitable that there will be belt tightening. The question is really how much? You know, the reality, as you always report, is that wages are not keeping up with inflation right now. There's very little, I mean, that picture may get a little better by the end of the year, but there's no, there's no great income for the middle class that's going to show up. That's really going to improve a lot of people's budgets in the late 2026. Right, right. Scale of one, to 10 then, and this is a little unfair because it's a nuanced question, but scale of one to 10, how macroeconomically worried are you? You got like 15 seconds. You can hear my deep sigh. I mean, macroeconomically, this is the frustration, right? And this is why I think the middle class is so gloomy.

Is this going to tank the economy? No, probably not. It's probably more like a four or five on your 10 point worry scale. But is this a long-term problem? Is this the economy that most Americans want? to feel that psychological tax of, gee, I can't do everything, not only can I not do everything I want to be doing right now, but I can't even do everything I could felt I could do even a few years ago. And that doesn't feel sustainable long term. No, sure doesn't. Heather Long at Navy Federal Credit Union.

She's a chief economist there. Thanks, Heather. Hey, thanks, Guy. Wall Street today, oil way down, stocks mostly down to. We will have the detail. else when we do the numbers. Let's keep going on that theme that Heather and I were talking about, things that are affecting the consumer mood out there.

We're going to do it, though, with an eye on the Wall Street narrative. Ever since the war started, conventional wisdom has been that high oil prices are driving inflation higher. Fact check, true. Over the past couple of days, though, the vibe has been that lower oil prices are going to drive more consumption, which is also going to mean higher inflation. Marketplace's a Justin Ho takes it from there. Earlier in the war, when a barrel of oil cost $25 bucks more than it does today,

markets were worried about inflation caused by a tight supply of oil. But now we're moving what appears to be more of a concern towards the demand side. That's Nathan Tuft with ManuLife Investment Management. He says falling oil prices solve the supply-side inflation problem, but they cause more demand. So people start thinking about inflation driven by the fact that the economy might actually improve because we're no longer having to worry about higher energy prices. The consumer has those dollars then to spend on other things.

And that can lead to inflation too. Tough says that's a concern for stock markets because in that case, the Federal Reserve might raise interest rates, which raises costs for businesses. Guy Laban with Jenny Montgomery Scott, says bond markets have been expecting higher interest rates. That's been pushing up bond yields and the value of the dollar. Much of that follows from Kevin Warsh's Federal Reserve

press conference last week in which he struck a tone that was hinting at higher interest rates. Of course, things might not end up playing out this way. Consumers might not have extra money to spend, says David Kelly with JPMorgan asset management. The key thing to recognize here is wage growth is still very low. In fact, the main number on wage growth was the second lowest we've seen in five years in a year-over-year basis. Kelly says population growth is another factor. It's slowed down, thanks in part to the Trump administration's crack down on immigration. And if you've got shrinking demographics, that means less demand for housing, less demand for consumer basics, and of course, the fewer workers.

And I think all of that is really acting as a constraint in overall economic growth. And the constraint on inflation. Kelly says that means the Fed will probably keep rates steady. I'm Justin Ho for Marketplace. We talked about the million-dollar starter home yesterday. Kristen Schwab did that story for us. Today, the flip side, homes under $100,000. First of all, they do still exist, but it's actually really hard to get a mortgage for them, something that the housing bill Congress passed last night addresses President Trump's refusal to sign it, notwithstanding.

Marketplace's Caitlin Tan has our story. The house you might be able to afford, but that you cannot get a loan for. Craig Richardson is perusing Zillow for homes under $100,000 near where he lives in North Carolina. I'm looking at two-bedroom, one bath, 729 square feet. That's a 9,000. little cottage. Another one's 55,000. It's a multi-family home. Another condo is 89,000. Richardson is an economist at Winston-Salem State University, and he actually bought a similarly priced condo as an investment. We had to refinance and wrap this condo into a larger loan that included both our house and the condo. He couldn't get a small mortgage for just the condo, And that's pretty common. People typically pay cash or go with riskier financing.

Such as land contracts, rent-owned agreements, or lease purchase. Tara Roach oversees Pugh's housing policy. She says it's hard to get a small mortgage because lenders don't like them. They have fixed costs no matter the loan size. It can make those small mortgages difficult to pencil for lenders. To make it worth their while, we'll likely take regulatory change. Roberto Kersia with the University of North Carolina at Chapel Hill says Congress's housing bill calls for that. It creates a policy and regulatory framework to eventually implement change. Kerccia still doesn't think $100,000 mortgages will be easy to find anytime soon.

I'm Caitlin Tan for Marketplace. If your getaway plans this summer involve internal combustion engines in any form, plane, train, automobile, or other, it's going to be expensive. So a lot of people already fed up with inflation and sluggish wage growth have been opting for vacations that don't involve burning quite as much crude as usual. Marketplace's Kelly Wells reports. Travelers facing tighter budgets have always been a good thing for tourism

and relatively affordable, Asthabila County, in the very northeast corner of Ohio. Stephanie Siegel is executive director of its visitors bureau. This isn't the first time that we've seen a little bit of a downturn in the economy. And whenever we've seen this historically, our area does incredibly well. Tourists from Detroit, Columbus, Cleveland, and Pittsburgh can get there in three and a half hours or less. They come because it is the home of Ohio's wine country, seventh largest in the nation. It's got lakefront beaches and beach towns. And the county boasts a whopping 19 covered bridges.

So when times get tough, people start to be a little bit more creative and don't just naturally jump on a plane and leave the state or leave the country, they start to look a little inward what's around them, what can they drive to, or what can they affordably get to. Because in Asthabila County, you can get a lakeside cottage that sleeps a family of four for 200 per night, then take the family on a self-guided tour of those covered bridges and finish a beach day at the local farmer's market, all for free. And that's what people seem to be doing. Typically, April is Ashtabula County's quietest month. But this year, A lot of our businesses reported having some excellent numbers in March and April.

Siegel says the county's tourism revenue is already up 13% compared to last year, with the busiest summer months still ahead. That lines up with another trend that lead economist Haley Berg with the travel app Hopper has been seeing, deal-seeking behavior. Trying to find ways to use their points to extend that budget a little bit more. shopping around, trying to find the best price, looking for offers. She says more travelers are blending work trips with vacation trips to cut down expenses. They're waiting for price cuts. They have their eye out for credit cards with good travel rewards. Travel is always the category that's being protected most.

When you compare it to entertainment, online shopping, eating out, that's the category that no matter how strapped budgets get. travelers are really trying to protect their vacation budget. So with higher vacation costs, people are traveling differently, not less. The U.S. Travel Association says domestic travel is going to increase again this year. Clint Henderson at the points guy says that if travelers surveyed by his company are changing their plans, they're driving instead of flying, they're going somewhere different, and they're going on shorter trips. If you're planning a trip with your family for the summer. Maybe you're not going to try to take them to Europe. Maybe you're going to go somewhere local instead. And there are still plenty of people who are forging ahead as usual.

Flight prices are up 20 to 30 percent in some cases, yet the numbers of people who say they're going to cut back on travel are very small. I keep thinking we're at the limits of what consumers will bear and they continue to shock me. But between years of inflation and higher fuel prices because of the war in the Middle East, Henderson thinks that travelers in the U.S. will finally start cutting back next year. But he also thought that last year, and the year before. I'm Kaylee Wells for Marketplace. Coming up.

I never paid so much attention to the 10-year and the five-year treasury note. Welcome to the club, man. First though, let's do the numbers. Dow Industrial's up 182 points to date one-third of 1%. 51,848. The NASDAQ down 110. That's points. Percentage is four tenths of one.

Closed to 25,476. S&P 500 dipped 7 points, 10th percent, 73, and 58. Caitlin was just telling us about the pursuit of $100,000 mortgages. So how about some lenders? Rocket companies started with mortgages and expanded into fintech, as you know, fired up 9.4% on the day. Loan Depot, that's a non-bank holding company that sells mortgage and lending products. Finance is interesting. Shot up 5 and 3 tenths percent.

Bonds up yield on the 10-year T-note 4.40%. You're listening to MarketPol. this Marketplace podcast is supported by Intuit QuickBooks. If you're trying to grow your business, Intuit QuickBooks workforce can help you lead your business with confidence, clarity, and in a way that makes sense for you. As a sponsor at Marketplace's My Economy, QuickBooks Workforce recognizes that no one person or businesses' finances are the same. As your needs evolve, QuickBooks Workforce evolves with you, bringing together the core HR capabilities businesses expect with the flexibility to adapt to your specific needs. QuickBooks Workforce,

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And thanks. This is Marketplace. I'm Kai Risdahl. There was a time, not all that long ago, 2010s-ish, when a very particular kind of direct-to-consumer retail was the hot, hot thing. Specifically, brands that targeted the sustainability-minded among us. That wave, though, seems to have crested of late Everlane, which built its brand on clean manufacturing, was sold to Sheehan, the fast-fashioned but not-so-clean manufacturing giant.

All Birds the Shoe Company? It does AI now. But some of the companies that caught the wave back then are still hanging on. Three years ago, I talked to Lindsay McCormick. She's the founder and CEO of a company called Bight, which makes plastic-free toothpaste tablets and deodorant. So you're going to see our office. It's a little bit of a circus right now.

I have so many questions. Their office inside a we work out in Culver City. California was indeed a bit of a circus. There were samples of packaging laid out on a table, boxes of product stacked all over desks. Fast forward to today, though, Lindsay has moved herself to Miami, and that office is no more. We are now a fully remote team. We have people all over the U.S. and the world, so we didn't need that space anymore. Okay. Now let's talk. Any space. Any space, right. Let's talk about the actual business. You know, you were, along with a bunch of

others that I mentioned in the introduction. You were one of those, you know, 2010s, late 2010s-ish companies that went direct to consumer for sort of sustainable products. And it was working really well. And I guess I want to know what happened. Yeah. So, you know, we, I feel very lucky that we're still one of the ones hanging on. We're still DTC. We're still sustainable.

But, you know, seeing like Everlane and Allbirds and just these epic companies that had such amazing messages, just kind of going the way that they did. I think that there's like a number of reasons. So, you know, one thing I think is that it's harder and more expensive to run a business, right? So I think we'll probably be talking a little bit about tariffs as well as even the fact that we're still made here in the U.S. And also consumer sentiment. I think it's changed a lot over the past few years. And we're actually seeing some really positive things in our space right now.

But it's a very, very recent thing. There was a few years that were a very, treacherous time for sustainable brands especially. So let's dig into that a little bit because you say consumer sentiment and I hear that thing that I talk about all the time, which is, you know, consumers are cranky, but that's not what you're talking about, right? There was a definite sort of change in the way consumers looked at sustainability. Yeah. So, you know, I kind of said, like I joke about this now. You know, I started my company because I wanted to save the sea turtles. And back in 2018 and 2016, that resonated with

people. They wanted to know what their products were doing for the planet, like what it, you know, what they could do to help. And what we're now kind of finding, especially with this new understanding of microplastics and the impact that it has on the human body, more people are gravitating towards that. So it's, you know, it's no longer about the sea turtles and now it's about ourselves. And same product, same, same goals, same mission. It's just a different type of messaging that is resonating with consumers right now. How do you know it's not about the sea turtles? anymore and it's more about people thinking about themselves and microplastics or what have you. So because we're a direct-to-consumer, we have a really interesting first eye look into this.

So we put hundreds of thousands of dollars through meta every month. And so we're able to see what messaging is resonating with people and what's not when you put an ad up against, you know, toothpaste is trashing the planet and then another add-up with how microplastics are, you know, impacting your body. and one of them just clearly wins every audience, no matter what. That's one of the reasons that we've kind of pivoted, not our ethos, not our mission, but our messaging until we kind of get back to that holistic view. Right. Sorry, just to be simple about this, literally what people are clicking on.

You can see that. Yep, that's it. Yeah. You mentioned tariffs, which I appreciate so that I didn't have to introduce it in this conversation. How have they been for you? So we were made in the U.S., or we are made in the U.S., and I think that a lot of people, yes, are. But no matter where your product is made, you have ingredients and components coming from all over the world. And so what had happened was that basically all of our manufacturers here in the

U.S. ended up having to up their prices in some ways, whether it was directly tariff-related, whether it's because they were getting hit. We ended across our entire product line having to pay more. And now that tariffs are getting paid back, we have not had that. We have not been made whole. Right. Did you just take those tariff costs out of your margin and you ate them? Yeah. We didn't raise prices. We just took it. So that was one of other reasons too, right? You start looking at being like, do we need this office space? Do we need? You know, like what can we do here to kind of make up for it? We still want to be able to provide for our customer. And so you kind of look at ways you can save that doesn't impact your company in a negative way. Right. This is sort of a tough question to ask an entrepreneur who has poured, you know, I don't even know. It's got to be like 10 years of your life. more into this and who knows how much capital, but are you going to make it? Yeah, we are. We're going to

be able to weather the storm. We're seeing like after a few tough years, we're seeing some really real traction with microplastics. And I think here's the thing, Kai, I think this is cyclical. I think people will start caring again about the planet. I think that we'll be able to be a part of our messaging. It's always been a part of our DNA as a company. It's going to be a good 2026, 2027. Hmm. Lindsay McCormick, CEO, founder also, of bite toothpaste bits and who knows what else she's going to wind up selling. Lindsay, thanks a lot. I appreciate your time. Thanks so much, Guy. We were talking a couple of weeks ago about how we're not making enough honey in this country to meet demand.

Maybe, though, a way to get your hands on some, if you can't find it at your local piggly-wiggly is to harvest it yourself. That's the setup for today's installment of our series, My Economy. I'm Adam Hickman from Fox Sound B Company in Irondale, Alabama. Our business is a beekeeping supply company where we supply equipment to beekeepers, provide them the bees they need, the queens they need, and we also do a lot of education about bees as well. So it started seeing some of my great-grandfather's equipment when I was a kid. I got some interest in how it works and decided, let me just try this out. So I started as a beekeeper myself, and then I became my own customer. I saw that there was a pain point for a lot of people who wanted to get into bees and built a little website, made a little money on the side, and then it just grew organically every year from there until the point I couldn't keep my full-time job.

And in 2020, a month before the pandemic started, I just had to do this full-time. I moved into an old warehouse that was rickety and leaky, but it was much better than a storage unit in my garage and operated in that space until it was a, The fall of last year was when we had our grand opening at our brand new 5,000 square foot building that is purpose built just for beekeeping. Moving into a new space and taking on an SBA loan and buying multiple warehouses was a huge leap. I felt like this was like when I quit my job. I never paid so much attention to the 10-year and the five-year treasury note as I did in that last year. We ended up closing on the loan a few weeks after the... that war started. And this isn't, I mean, a house is a huge purchase, but this SBA loan is, is huge.

And, you know, a quarter percent is several hundred dollars every single month for the next 10 years, at least. But it's hard. I wish we'd close 30 days before. Fox Island is a seasonal business. So we do a lot in the spring in the early summer. And then as the flowers stop blooming across the country, this kind of slows down a little bit. I look at year-over-year numbers, and Foxxound Bee Company is doing great. I'm really proud of our team and the business that we're still pulling in or double than we were last year. It is a beautiful place to come to work.

I spend more time pulling out a keyboard than I do pulling frames out of the hive, but I absolutely love going to talk to customers and opening hives. It's a very rewarding place to be. You guys, that's why we talk about the bond market. so much. Adam Hickman, beekeeper, proprietor, Foxhound, bee company, Irondale, Alabama. Send us your stories, would you, marketplace.org, slash my economy. All right, too much of me talking, not enough time. We got to go. Our media production team includes Brian Allison, John Fokie, Montana Johnson, Drew Jostet,

Gary O'Keefe, and Charlton Thorpe. Alex Simpson is the manager of media production. And I'm Kai Rizdahl. We will see tomorrow, everybody. This is APM. We're approaching the end of our budget year here at Marketplace, and your support is crucial to powering economic reporting that puts you first. And if we hear from 500 listeners before June 30th, you'll help unlock $50,000 from the Marketplace Investors Challenge Fund. So don't wait, give now, and support this nonprofit public media service.

Marketplace is here for everyone, and it's powered by you. So please donate at Marketplace.org, and thanks.