Marketplace - Inflation came down in June. Will it stay that way?

Episode Date: July 14, 2026

We got a better-than-expected June CPI report: Inflation slowed in both the goods and services sectors. But it’s hard to say whether that trend will continue and how it might affect the Fed’s next inflation rate decision. Also in this episode, Fed Chair Kevin Warsh testifies before Congress, so we break down his approach to central bank communication and the Humphrey-Hawkins Act. Plus, an egg price-fixing scheme, the hog lobby, and credit cards.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 from today’s episode: Inflation slowed in June. What does that mean for interest rates?Can the hog lobby — and falling prices — get Americans to eat more pork?Cracking open the price-fixing scandal behind rising egg pricesWhat higher credit card spending means for the economyWhy Kevin Warsh is on Capitol Hill today

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1,000 organizations worldwide. GEP combines agentic AI with three decades of procurement and supply chain data and expertise. Learn more at gEP.com. Happy Humphrey Hawkins Day, everybody. Inflation's a choice. We monetary policy makers, Need to choose lower prices, and that's the commitment my colleagues have made. Well, I guess that about Settles in, huh? From American public media. This is Marketplace.

In Los Angeles, I'm Kyle Risdahl. It is Tuesday. Today, the 14th of July, good as it always is to have you along, everybody. I know it feels like he just got the job because he kind of did. But Federal Reserve Chairman Kevin Warsh spent his morning today on Capitol Hill, explaining to lawmakers how he plans to handle this economy. Timing could not have been better, actually, with that softish update on the consumer price index that we got this morning, more about which on this program in a minute.

But the most interesting thing about Chairman Warsh's testimony today was, in a way, what he didn't say. The unspoken subject at hand, that thing that, I guess, used to be called forward guidance, the Fed letting everybody know what it was going to do before it actually did it. If we were to share with you our every passing thought, I worry not that there's anything wrong with us, but we're human. And if we were to give you my projection today about what we'll do when we meet in two weeks, what we'll do over the course of the year, that we then find ourselves sort of taking information that's consistent with our priors and rejecting information that's inconsistent. It's not the way we want to do things.

Calling balls and strikes is the way the chairman put it this morning. He did obviously talk about the economic issues at hand, while kind of at the same time reminding lawmakers, the change is a coming to the central bank. The 63 months of inflation above target has been an unfair burden and has been a tax on the American people and businesses. We plan on getting rid of that tax. That means we need a regime change in policy and we need new consideration of practice. some of which have been working, some of which haven't. That's what we aim to do, and we're just getting started.

That regime change and new consideration of practices are going to come with those five task forces. Chairman Warsh announced a month or so ago, no date yet for their deliverables. More, by the way, on why Warsh was up on Capitol Hill today coming up in the second half of the program. So about the actual performance of this economy. unexpected is a word you might use for this morning's inflation data. The consumer price index actually fell in June, year over year inflation down from 4.2% in May to 3.5% last month. Falling gas prices, yes, sure, but even the core rate has come down to 2.6%, still elevated, but at least a little bit closer to the Fed's 2% target.

Marketplace is Mitchell Hartman, did a little digging into what's what. Economists and policymakers have been worried about the recent resurgence in inflation. So there was a lot to like in this report, starting with the deceleration across both goods as well as services. Gargi Chodry at Black Rock points in particular to services where prices could have spiked, thanks to soccer tourism. Airfares, lodging away from home, food away from home, that would have a little bit of the World Cup flavor to them, if you will. they haven't generated a meaningful inflationary impulse.

Now, what the Fed might make of this report as it plots future interest rate policy to fight inflation, that's up for debate. In the dovish glass half full camp is Jay Hatfield at Infrastructure Capital Advisors. He points out that one big component of inflation, rent, is basically flat now. The report was very positive for future inflation. hopefully put the Fed back on track to hold rates for now and then cut when energy prices come down when the straight reopens. In the glass closer to half empty camp is Richard de Chazelle at investment firm William Blair. It was clearly better than expected, but I don't think it quite gives us the all-clear signal. The softness of this report suggests that we won't have a rate increase at the end of July,

but it doesn't take a rate increase off the table for September. For one thing, he says, consumer expectations of inflation are still elevated, and the Fed may need to hike rates to fight that. For everyday consumers, just going to the grocery store, all they see is continued high prices. Including gas prices going back up this month as the war in the Middle East heated up. I'm Mitchell Hartman for Marketplace. On Wall Street today,

inflation slower. The Fed chairman basically neutral. Big bank earnings blowing expectations away. We will have the details when we do the numbers. Core inflation is all well and good, and you get why central bankers like it. Taking out food and energy because they bounce around a lot gives one a better sense of the underlying trends. But we all got to use energy and we all got to eat. And if you are a carnivore, you are well aware of the high and rising cost of beef. We're going down to the other end of the butcher's counter today, though. Pork, wholesale prices are actually down this year. Retail prices have been pretty stable. Marketplace's Caitlin Tan has the hog report. Glenn Tonzer grew up on a hog farm. I worked on the farm before school,

I worked on the farm after school, and we got up at 5 a.m. to load hogs on a truck one day a week. His hog farming days are behind him. Tonzer is now a professor at Kansas State. He tracks the pork industry, which is somewhat benefiting from the protein craze. It's very much a pro-meat environment they're operating in, and yet their category has trailed beef a little bit. Demand for beef is surging in a way that pork isn't. Tonzer has a theory that it's generational. Boomers and Xers grew up on big dinner plates with meat at the center, like a pork chop, but not so much millennials and Gen Z. The average 20-year-old approaches meat protein as an ingredient. Like ground beef taco bowls or grilled steak salads.

And the pork industry is asking, why not them? There's even a national ad campaign, taste what pork can do. Lots of effort targeting folks that aren't what you might call pork loyalist. Mississippi State Ag-Econ professor Josh Maples is one of those loyalists. I'd love a pork tenderloin. He says grocery pork prices are relatively steady because unlike cattle in the shrinking national herd, hogs are doing all right. We hit a record high of 11.9 pigs per litter earlier this year.

Supply is strong and pork demand is so-so. That doesn't really spell huge profits for hog farmers, says Ken Foster with Purdue. It's not necessarily that they're losing money, but they're not making as much money as they could if pork prices were higher. Plus, hog farmers are just like the rest of us. They've also taken a hit from high fuel and living costs. I'm Caitlin Tan for Marketplace. We're going to keep going with inflation and food now, dairy department this time, eggs specifically, which were for a good part of last year, the proxy for inflation gone wild. There was a big settlement a couple of weeks ago.

allegations of three years worth of egg price fixing. It is a tale, yes, of eggs, but also of market mechanics. Patrick Thomas covers agriculture for the Wall Street Journal. Thanks for coming on. Thanks, you so much for having me. I guess first things first is, would you tell me what this egg clearinghouse thing is, please? Yeah, so the egg clearinghouse is essentially think of it as a wholesale marketplace for eggs, or as it's known nicknamed among the egg producers, the Wall Street.

of eggs. Basically, what it does is buyers and sellers or producers of eggs, buy and sell from each other. So in big demand seasons, or maybe you have a flock that went down with avian flu, you can kind of go on to the egg clearinghouse and basically put out a call for eggs. Hey, I've got an order to do for Kroger. I need eggs. They put out a bid for eggs. And then you have somebody who says, I've got eggs, and then they offer you the price for it, and so on and so forth. So it's kind of a necessary part of the egg supply chain. And it is, according to the allegation and the settlement here, the thing that was basically being manipulated, yes? That is correct. Basically, the Department of Justice is saying that some sharp traders communicated among themselves, these companies,

several of the big companies, one smaller one, figured out how they could gin up the prices a bit if they used the egg clearinghouse to flood it with bids and flood it with higher prices. they kind of figured out how to use it to their advantage, basically, is what the department alleges. And that relatively small-ish, I mean, it's, you know, big and absolute terms, but relatively smallish is compared to the entire egg market in this economy. Influence then the price that we see or we're seeing when we went to the grocery store. How? Well, so what you have is you have these benchmarking firms, these firms, Earner Berry, which is now called Expana. Basically, what they do is they kind of set this benchmark price for eggs. But it's a data point.

So when they see really high prices being thrown out there on an egg clearinghouse and suppliers, like the fellows that were talking amongst themselves about trying to put out high-priced bids, when someone from Earner Berry sees that, they think, well, the egg rice benchmark, maybe we'll keep it up a few cents. It goes into the equation of how they price eggs, which trickles down to the consumer. Right. And a couple of pennies on a, you know, a couple of zillion eggs is a lot of money. It adds up over time.

Right, right. These guys obviously got caught, so maybe they weren't so smart, but it does strike me that this seems to have been pretty easy to do this manipulation. Yeah, you know, that's one of the, I think the Department of Justice doesn't necessarily get into it in their complaint, but it does kind of expose one of the fundamental issues in the egg market and some of the folks who are critical of egg prices during some of the avian flu outbreak at the time flagged, that there's not a ton of players in this market. And if you're using something like egg clearinghouse, they raise into question, is there enough participants in this market? Or is it too easily manipulated?

But those are some of the things being called into question by some folks critical of this market. Is it too easy to do this? Yeah. Just because you mentioned avian flu and as a way to wrap things up, you know, we were told, and I'm sure I said on the radio more than one time, egg prices are up and that's part of inflation because of avian flu. And it turns out maybe not. Well, avian flu is still the primary driver here at egg prices. It's, you know, to take a step back for a moment.

In 2022, when this outbreak started, since now, it's led to the death of over 200 million commercial hens. Yeah, fair. It has been a massive hit to the supply. And if you think about it, the prices can spike. And that's what we saw. Now, what the Department of Justice here is saying is, is that executives basically didn't let a good crisis go to waste, but the avian flu is still the primary

driver of what sent egg prices up. I don't think the department disputed that at all in this complaint. All right, fair enough. Patrick Thomas covers agriculture at the journal, eggs in this case. Patrick, thanks a lot. I appreciate your time. Thanks so much for having me. I mentioned big bank earnings a couple of minutes ago. Bank of America, Citigroup, and J.P. Morgan Chase reported this morning leaving expectations in the dust. A common theme among the three, consumers are reaching for their credit cards more. All three of them said credit card use was up this spring from the same time a year ago.

Marketplace's Stephanie Hughes is on that one. In the past few months, 32-year-old Katrina Lyndon has been spending a lot on fun stuff. She bought tickets to the music festivals, Coachella and Bottle Rock. She went skiing. She went camping. So just putting more towards, like, the larger experiences. Lyndon used credit cards to pay for that travel. She makes at least the minimum payment on each of her. cards every month, though she does carry a balance. But she says being able to do the things she wants to do

is worth it. It's clear that like homeownership is out of reach for me at least for the time being. So I'm like trying to move away from saving for a future that like might not even be possible and spending more on immediate experiences. Travel and entertainment fun generally was a big credit card purchase for lots of people this spring, says Laura Monfred, head of credit card products at Bank of America, which is a marketplace underwriter. Cruise lines, airfare, FIFA World Cup is happening right now. We are definitely seeing elevated spend in cities that are host cities.

But also, people are charging more of the necessities. Things like fuel, and that's going to be driven more by things like gas prices going up. Montfred says more of their customers are paying their balances off in full than were prior to the pandemic. But consumers need to be careful, says banking industry consultant Merrill J. Reynolds. He says, as a rule of thumb, a person's credit card debt shouldn't be more than 30% of their available credit. Or their credit score could get dinged. You won't be able to get credit as easy.

And if you're successful in getting credit, it's going to probably cost you more from a loan standpoint. Reynolds is also going to be watching to see whether people fall behind on their payments. Then you've got to start worrying about people paying their mortgages and people paying their car loans and those types of things. He says credit card delinquencies are an early sign of problems with the economy. I'm Stephanie Hughes for Marketplace. Coming up. So many people come in the store and they say, oh, I've had a terrible day. I've had a bad day.

But coming in here makes me so happy. Ain't nothing. A little retail therapy can't fix. But first, let's do the numbers. The Industrial is up nine points today. we'll call that basically flat 52,508. The NASDAQ gained 233 points, 9 tenths of 1%, 26,107. The S&P 500, 28 points to the good, 4 tenths percent, 75 and 43.

Hormel Foods, the maker of Spam and Lloyd's pre-cooked barbecue ribs increased 1 and 4 tenths percent. Today, Smithfield, which owns the Eckrich and Nathan's famous brands of tubed meat, down two-tenths of 1 percent seaboard, which processes turkey as well as pork. dropped to 1 and 3 tenths percent today. Heavy on food on this program, I guess. Here's banks, though. J.P. Morgan surged 2.5% Bank of America, which, as Stephanie Hughes just said, as a Marketplace underwriter, expanded 1.9% city group, sank 5 and 3 tenths of 1% on the day.

Bond prices. Lay one up. Thanks for asking the yield on the 10-year Tino down 4.58%. You are listening to Marketplace. This Marketplace podcast is presented by Tomorrow's Cure. If our health care coverage leaves you wanting to live. learn more about the innovations shaping medicine, tomorrow's cure is for you. It's the chart-topping 2025 Amby Award finalist podcast from Mayo Clinic. Back for a brand new season with new host

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and what it could mean for the future of precision cancer treatment. So go ahead. Follow tomorrow's cure on Apple Podcasts, Spotify, or wherever you get your podcasts. This is Marketplace. I'm Kai Risdahl. Kevin Warsh was on Capitol Hill today, as I said up at the top of the program, for the first of two days of twice a year hearings, sometimes referred to as, as I did, Humphrey Hawkins. And in keeping with the longstanding policy of this program that history matters, the reason for those hearings is worth talking about. The Humphrey Hawkins Act was put in place to sort of specifically shape the Fed's role in economic policy. That's Eric Hilt. He's a professor of economics at Wellesley College. Humphrey and Hawkins were Senator Hubert Humphrey and Representative Augustus Hawkins, who sponsored a bill that eventually became the Full Employment and Balanced Growth Act of 1978.

Also known as Humphrey Hawkins. Let me back up just a little bit, if that's okay. Yeah, of course. Martha Olney is an economic historian and Professor Emerita at UC Berkeley. Actually, we can go back to 1791. Okay, yeah, no, no, we can't. I will summarize by saying, that over the past 200-plus years, the federal government has experimented quite a bit with the banking system. I wanted to go back to the history because it is the case that we always get changed when there's a crisis. The Civil War. Financial panics, the Great Depression.

Panic legislation. Panic legislation. It's a pattern, right? Okay, now fast forward to the 1970s. The American economy was experiencing stagflation. The year Humphrey Hawkins was introduced, 1974, headline inflation hit double digits. Real GDP shrank, and the unemployment rate rose to 5.6 percent. It hit 8.5 percent the next year. The Fed was not perceived to be performing its role very well. The Humphrey Hawkins Act says, okay, it's not just the federal government's responsibility

to take care of employment and inflation. It's the central bank's responsibility. Say it with me now. the dual mandate, stable prices and maximum employment. You know it oh so well. The law explicitly made that the Fed's job. There's a third thing in there that they never pay attention to. Yes, the little known third thing in the dual mandate, which is moderate long-term interest rates. And the reason I think that it isn't discussed much is simply that if the first two goals are pursued adequately, then the third will naturally be met.

thing is, though, when Humphrey and Hawkins first drafted that bill, it had more in it, way more. The purpose of the bill in its earliest iteration, really, is to create a federal guarantee for a job for all Americans. Think about that for a second, a federal jobs guarantee. Patrick Andalick is an assistant professor of political history at Northumber University in Newcastle, Newcastle, Newcastle upon time, that is, in the UK. Endelike says early versions of the bill would have created a legally enforceable right for anyone who wanted a job to have a job. So an American who remains persistently unemployed, in theory, would have been able to sue the federal government for relief and damages. And it would have required Congress and the president and the Fed to work together on a coordinated economic plan.

The final version of it is a much more watered down bill. You got to remember here in the 1970s, we're pretty much the Watergate decade, right? American politics was moving past the World War II, New Deal, Great Society era, and headed into the days of anti-big government. There are a series of negotiations basically through 1977 that strip a lot of the more radical elements out of the bill and create this situation where the bill kind of commits the United States to a lot of things, you know, maximum employment, controlling the inflation rate, but doesn't provide much in the way of enforcement mechanisms. One enforcement mechanism that did survive was a requirement. for the Fed to report to Congress. Which is kind of how we get from the original Humphrey Hawkins Act to the Federal Reserve Chairman appearing twice a year to give this monetary policy report to Congress.

Sort of reminding the Fed and everyone else that the Fed was created by Congress and is answerable to Congress. We should note here that until recently, the past couple of decades, really, the public didn't regularly hear all that much from Fed shares outside congressional testimony. There were no post-meeting press conferences. and usually not even a written statement after interest rate decisions. So the public has many more opportunities to hear about the Fed's thinking now, and the Humphrey-Hawkins testimony is less important than it once was.

But this Fed chair has made it clear, as you heard, up at the top of the program, that he wants to change how the Fed communicates. Press conferences, speeches, forward guidance. He created a whole task force, as I said, to review it, and the implication clearly is reduce it. If Moore scales that back, then his... is Humphrey Hawkins' testimony is going to become much more significant than the testimony of prior Fed chairs. It was the House Financial Services Committee that got its turn with Chairman Warsh.

Today, he'll be across the rotunda in front of the Senate Banking Committee for day two tomorrow. We started today talking about inflation. That was oil prices mostly, as I said. The other thing, though, that has of late weighed on prices, haven't talked about it in a while, though, tariffs. The Yale Budget Lab has the effective tariff rate right now. At 11%. It was 2%, about a year and a half ago. And small businesses are feeling that.

Johanna Dominguez is our plant shop owner that we talk to at Put a Plant On It, she's in Buffalo, New York. Business that put a plan on it is pretty good. We're steadily having people coming in. We've got some large accounts that we've been filling. We have noticed a little bit of a slowdown. We're not sure necessarily if it's related to people spending. Sometimes weather has a big impact, too, and it's been really a new.

usually hot here, so not as many people have been out. For all, I would say our costs are okay. Usually, I act as my own plant sourcer, and I order from anywhere between 10 to 30 different nurseries. I hire my own trucking company to collect those plants and bring them to us. The last I checked in with my trucking company, they have a 32% tariff increase, and they also charge a fuel surcharge and it almost doubles shipping costs. Honestly, the biggest challenge, I would say, is like sourcing different kinds of plants and sourcing enough variety.

You know, I found some workaround. There's a couple plant nurseries that I order from that are online and they ship them via FedEx or UPS. We also propagate a bunch of our own plants as well. That's the way we can source plants for less is by growing. our own, but of course, you know, that takes time. So we can't always grow everything ourselves. So we usually only grow and propagate our own plants twice a year. When things get tough in the plant business, honestly, what keeps me in the plant business is the people. So many people come in the store and they say, oh, I've had a terrible day. I've had a bad day. But coming in here makes me so happy. And then, of course, we have our birds and everything.

And so we want to stay here for our community and for our people. I remember those birds from when we were there. Johanna Dominguez put a plant on it, Buffalo, New York. This final note on the way out today, just because, you know, geopolitics are still a thing that's happening. The Strait of Hormuz is still closed, which means oil went up again. Another 2, 2.5% for the two most cited benchmarks.

Jordan Manjizoneal Maharaj, Janet Wynn, Olga Oxman, and Virginia K. Smith are the digital team. I'm Kai Rizdahl. We will see it tomorrow, everybody. This is APM. If your kids are big thinkers, they're going to love Million Bazillion. It's a podcast for Marketplace about money for kids and their families hosted by me, Bridgett. And me, Ryan, each week we go on a spectacular adventure with a whole cast of fun characters to learn about things like the gold standard, digital currency, and even wide gas prices go up and down. There's a bunch of new episodes out now, so go listen to Million Bazillion on your favorite podcast app.