Marketplace - Triple-digit trouble

Episode Date: March 30, 2026

The cost of a barrel of crude surpassed $100 over the weekend, as war in the Middle East continues to block oil shipments. In simpler, car-commuter terms, gas prices have risen to $4-ish per gallon. But even if the conflict ended tomorrow, they would be slow to fall. Also in this episode: Small business owners remain cautious to hire, community banks struggle to win deposits, and some sectors could see job cuts if the war in Iran continues.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.

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It is Monday. Today, this one is the 30th of March, good as it always is, to have you along, everybody. To be fair, these are trying times indeed for traders and the algorithms they live by in the space of literally two. back-to-back sentences this morning. President Trump said negotiations with Iran are showing great progress. That's a quote. But, and if there is no deal soon, complete obliteration, his words will follow. So with that as backdrop, and we are, by the way, going to get into the bond market just a little bit later on.

But with that as backdrop, the overall theme of the program today is the economy yet to come. Because as we have been reporting, there does seem to be a very short-term, focus on the war's economic ramifications at the expense of some longer-term thinking. Oil is where we are going to begin. West Texas Intermediate, the U.S. benchmark, up better than 5 percent today, almost $105 a barrel. Marketplaces Kristen Schwab gets us going with the oil market yet to come. It took a month for oil to go from $60-something dollars a barrel to 100. Hugh Daigle, a professor of petroleum engineering at U.T. Austin, says, believe it or not, that's actually the market showing restraint. Now that we see that this may be a prolonged conflict, I would

bet that it's more likely that the prices will climb faster than they have over the past month. Markets are finally, truly pricing in the war, because even if it ends tomorrow, it would take months for the price to come back to kind of that February baseline, if it ever does. There's a saying in the oil industry, prices go up like a rocket and come down like a feather, especially in this case because of damage to oil and gas infrastructure around the Persian Gulf. That's the sort of thing that it's going to make these high prices persist for a long time. $100 a barrel is also a turning point for consumers, because it translates to moving from $3 something to $4 for a gallon of gas.

Tom Closa is the chief energy advisor at Gulf Oil. You know, in the United States, the great Satan is high gas prices. Closa says $4 is a big hurdle for oil. people's minds and wallets. I do think that once we go about $4, and we'll cross that bridge in the next 24 hours, then you start to worry about demand destruction. Demand destruction, meaning consumers will pull back on driving and spending in general.

How high oil and gas prices go depends on how long the war lasts and how long it takes for the Strait of Hormuz to reopen. For each day that that doesn't happen, the situation gets more severe. Alan Gelder is Senior Vice President of Refining Chemicals and Oil Markets at Wood McKenzie. The International Energy Agency recently released 400 million barrels of oil reserves. Gelder says we have about a month before we burn through it all. So if this continues to last further than that, then the situation just exacerbates itself. Gelder says oil at a sustained price of $125 a barrel could cut into global GDP growth by as much as half.

oil at $150 or above means serious danger for the economy. I'm Kristen Schwab for Marketplace. Wall Street on this Monday, you had the president's social post. You had Jay Powell on a talk at Harvard saying the Fed's going to look past the energy spike for now. And you had the general unease. We'll have the details when we do the numbers. Well, let's see. There's the war and its underlying inflationary tendencies even beyond the energy spike.

There's the extra $200 billion. The Pentagon says it needs to borrow to pay for said war. That is a drop in the bucket overall. Yes, but still, it's real money. And as a result, there are bond yields higher by a good margin than they were a month and three days ago. If you want to know where this economy might be going, the bond market can be a pretty good guide. So we've called Andrea Isfeld. She's a professor of finance at UCLA to help us read the T.Ele.

Professor, welcome to the program. It's good to have you on. It's great to be here. Even all of the setup that I just did, that long list of what's what with the bond market, do me a favor and decipher it for us and help me understand what story the bond market is trying to tell us right now. Well, it's hard to say for sure because it's sort of in a very incredible balance right now between fears of inflation and high oil prices and the Straits of Hormuz.

But at the same time, the U.S. is still seen as a safe haven. And so for now, we've seen yields increase, but not as dramatically as we might have expected, given where gas prices are. The bond market is saying to us right now, I think, that inflation is the right way. Am I reading that the right way, given the gas prices and all that? I think so. Yeah, we're seeing higher yields because we're worried about inflation. That's something we've been battling since COVID. And this new conflict has really made things worse. Okay, where then is the growth problem, right? Because there are two sides to what's happening here, right? There's the inflation risk, which we're seeing present right now. But then there's also sort of the economy yet to come, to keep up with the program today, of growth being a challenge as this war continues and the stranglehold on the strait and all of those other things that affect supply chains and logistics continues, right? Growth is a problem yet to come.

It is for sure growth and employment and pretty much everything we do takes energy and we're still very dependent on fossil fuels and oil and gas. So we've got a lot of uncertainty of how things are going to look going forward. So as you peruse bond yields in the morning over your coffee, I'm just assuming you do because you're a professor of finance, right? Of course. Okay. Okay. What are you looking for? I'm looking for the direction and I'm looking at the levels over different periods in history. I looked also at dollar exchange rates with respect to other safe haven currencies like the yen or the euro or the Swiss franc. And we've seen all of those countries have slightly higher yields.

But the dollar is really holding its strength as well. So are we then, sorry to interrupt, but are we then the United States? states that is, doing better relative to most other large economies on the planet right now? I think we are because we have more of our own energy resources. So I definitely think that's the case. Right. If I am a guy in Atomwa, Iowa worried about, I don't know, my combine and making my payments on my farm and also there's a college tuition and a car loan and I have to worry about a mortgage too. Help me understand why the bond market matters to him. It matters for any borrowing costs. It also probably manages for any risk management he does with respect to his crop prices

because all of those futures prices also depend on interest rates. And for any college loans, look, it's expensive. Yeah, it is indeed. How worried are you about, you know, let's stick to the topic at hand. The bond market specifically and borrowing costs. and how important that is to this economy and how much we don't know about where this war is going to go. What's your stress level? I would say it's probably an eight and a half with respect to the war with the war and where it's going to go. With respect to the bond market, I'm just, I'm really impressed. I think we have an amazing financial system.

I think the Fed has been doing an incredible job. I think you can see that in the fact that we've had safe haven kind of behaviors. I think controlling yields on, you know, from going too high. So I'm not as worried about the bond market as I am, as you said, about the ongoing conflict. Yeah. Andrea Asfeldt's at UCLA Anderson, where she's a professor of finance. Professor, thanks for your time, M. I appreciate it. It was great to be here, Kai.

We're not really going to learn a lot about the war's lasting impact on this economy. From the March jobs report we're going to get on Friday. It will have some data collected in the early days of the war. Maybe there will be some information. we can make. But overall, we're going to have to wait to really get a sense. Marketplace's a man at the field spend her day talking to analysts about the labor market economy yet to come. As soon as the war started, the price of oil shot up and gas prices followed. Angela Hanks at the Century Foundation says as gas prices rise, consumers get stretched.

You have to get to work. You have to pay your electric bill. And so I think we'll see that show up as reduced demand in other sectors where people have more opportunities to make choices about whether or not they spend. The more people have to spend on gas and heat, the less they have to spend at restaurants or on clothes and trips. Josh Bivens at the Economic Policy Institute says job-wise right now, he's most concerned about people who work in industries fueled by discretionary spending. Obvious ones are like restaurants, arts, entertainment, some travel. I think that's where people have the most ability to quickly adjust their spending. And those are also industries that are pretty quick to lay people off as soon as that spending dries up a little bit.

The longer the war goes on, the riskier things get for other industries, too, especially ones that rely on anything that passes through the Strait of Hormuz. Liz Pankati at Groundwork Collaborative is worried about agriculture. About 25% of farmers had not yet purchased their fertilizer for this growing season, and so that is one that is quite concerning to me. Also concerning, industries that rely on helium. Helium is obviously used for some medical supplies and for the balloons you might blow up for your children's birthday, but more importantly, it's used for computer chips. And right now, I am really hoping we are not staring down the chips crisis that we saw in 2021, 2 and 23.

During the height of the pandemic, when companies couldn't get enough chips for computers and cars. A repeat of that would hurt consumers and people who work in those industries. Angela Hanks at the Century Foundation says the war is also coming. on top of a lot of other stressors for businesses, inflation, high interest rates and tariffs. There's only so many of those kinds of shocks that business can absorb before we start to see job loss. In multiple sectors across the economy. I'm Samantha Fields for Marketplace. Talking to analysts and economists about what's going on out there, as Sam Fields was just doing, is all well and good. And we do a fair amount of that because it's valuable. But sometimes if you really want to get a sense of things on the ground, You have to talk to the people actually making this economy go.

That's the assignment at Marketplace that Mitchell Hartman got this morning, the small business economy yet to come. For a while now, we've been hearing that employers are hesitant to add workers, also hesitant to lay off the ones they've already got. And that is what I heard from small business owners I connected with today. We're hiring right now because we're replacing people, but no, we're not looking to increase employment. That's Adam Orman in Austin, Texas. He's got two Italian restaurants, one casual, one more upscale, and his head count now is about 50 employees. It has shrunk a little bit for a number of reasons. Inflation-weary consumers are dining out and drinking less, plus...

It continues to be very difficult to hire. A lot of people left the restaurant workforce during the pandemic. And then over the last year and a half, we've seen a lot of immigrants leave the workforce either by choice or because they've been detained or deported. Matt Hassett is CEO of New York-based Lofty, which sells alarm clocks, lamps, and other products designed to promote better sleep. He's got seven employees. It's stable. We've had a few people leave, and I'm not hiring to fill those positions. 2025 was a very tough year. The tariffs made it very hard to predict what our costs were going to be.

Hassett now has two employees in Europe, and he's expanding international sales. Barton O'Brien is founder of Bay Dog, an eight-year-old business based in Annapolis, Maryland, that makes gear like dog harnesses and life jackets, also treats and toys. O'Brien is hearing from pet store owners that consumers are now pulling back on the doggie discretionaries. The consumer walks in, they get that bag of food, and those secondary purchases just aren't happening because nobody has any extra cash. O'Brien says his costs are way up, profits are down, still he's optimistic. I think I'm going to be able to continue to grow the company. I just hired two people in Q4.

Bringing his total headcount to seven, with another 45 working as contractors in production, sales, and e-commerce. I'm Mitchell Hartman for Marketplace. Coming up. It's not as simple as just saying, let's just release everyone to the marketplace. It's not? But first, let's do the numbers.

Down industrials up 49 points today, about 10%. 45,216. The NASDAQ sank 153 points, 710%, 20,794. The SP 500 down 25 points, 410%. Ended things at 63. 43, a relatively calm day on Wall Street, one might say. Cisco, the country's biggest food distributor, just got bigger. Cisco has reached a $29 billion deal to acquire Jetro Restaurant Depot,

which sells catering supplies and restaurants. equipment. Cisco plunged 15 and 3 tenths of 1% today, as often happens, the acquirer plunges. U.S. Foods Holding Corporation, how's that for a company name, increased one-tenth of 1% performance food group, improved 1 and a half percent on the day today. CVS. Health says it's going to open approximately 60 new stores this year. That's the move that follows years of store closure. CVS Health gained it just under one-tenth of 1% on the day. Bonds up. Yield on the 10-year T-note down just a bit, 4.35 percent. You're listening to Marketplace.

This is Marketplace. I'm Kai Risdahl. This economy needs a lot of things to work the way they're supposed to if it's going to grow. Consumers consuming, companies profiting, and banks lending. And if banks are going to be able to lend the hundreds of billions of dollars, the economy needs them to lend, those banks need deposits because that's where the loans come from. According to the Federal Deposit Insurance Corporation, bank deposits have been growing for more than a year and a half now. now. But that rising deposit tide does not seem to be lifting all banks equally. A lot of smaller

community banks are being left out. So Marketplace's Justin Hoam made some calls to see what's up with customer deposits and what those smaller banks are doing about it. At a community bank called Bank in New Canaan, Connecticut, Ryan Hildebrand, the chief innovation officer, noticed something was up with deposits when the Federal Reserve began raising interest rates a few years ago. Customers started to look at, you know, who's going to pay the highest amount. The competition to win depositors by paying them higher interest rates started heating up. And it wasn't necessarily just other community banks. You had a lot of fintechs that were paying the highest rates in the country.

You had treasuries and money market accounts that were paying high rates. Ever since then, many smaller banks have been having a harder time holding on the deposits. Julie Hill, Dean of the University of Wyoming's College of Law, says big banks have big marketing budgets, sophisticated technology, and big footprints in large urban markets. And so that means that community banks, particularly in smaller communities that aren't growing as rapidly, just have fewer deposits to attract. And that is a problem for those smaller banks.

We can't lend if we don't have deposits. That's Andrew Silsby, CEO of Kenebeck Savings Bank in Augusta, Maine. He says his bank has been feeling pressure to raise deposits because customers have been clamoring for bigger loans. We do about 1,500 mortgage loans a year, and the average size of those mortgages have gone up substantially. Banks use a few strategies to ensure they can keep lending money. We're not necessarily chasing a lot of new customers and trying to bring in new relationships. We're more likely focusing on existing customers who are expanding their business or folks that are already doing business with us. Smaller community banks are also asking their borrowers to park money with them.

My area of the bank is deposit, so I may say to the chief loan officer, hey, have we asked if they could open up a deposit account here? That's Kevin Boyce, founder of Adelphi Bank in Columbus, Ohio. He says the bank isn't forcing its borrowers to deposit money with the bank. It's playing the long game. You know, when you come in our doors, we want a loan, that's what we're going to focus on. Yes, we want your deposit, but it is not core to us giving you the loan. You know, it is the hope that we want to earn that.

that it's a meaningful relationship for both of us. Pulling in deposits can also be a matter of simply paying the right interest rate. Generally speaking, the best option you have is you can pay more. Dominic Miyartan, the CEO of American Pride Bank in Macon, Georgia. He says even though the Federal Reserve has been cutting interest rates over the past couple of years, his bank has kept rates relatively steady. Because we actually have an opportunity in declining rate environment to maybe pick up some customers that are very rate sensitive.

We want to join a bank that's still paying a, a good, strong rate. Meartan says the last few years have taught people to be a lot savvier about interest rates. I'm Justin Howe for Marketplace. In most states, 32 out of 50, if you're counting, electric utilities are monopolies. Soul providers, consumers can't pick and choose. In exchange for that kind of market control, they are regulated by the state government. But with electricity bills basically everywhere going up, lawmakers in some of those states

are asking whether that regulation is actually effective, or whether maybe a free market might do a better job of controlling prices. From KBIA in Columbia, Missouri, General Schlese reports. Don Mayhew believes in the free market. We have choice in a lot of different things. Go to a grocery store. There's four different brands of green beans you can buy. We know that competition in any marketplace is the foundation, the cornerstone of our capitalist system.

which is why the Republican, who represents a mostly rural Missouri House district, has proposed a bill that aims to break up the state's monopoly utilities, which is currently awaiting a hearing in the statehouse. Corporate energy companies in most states are vertically integrated, which means they both make energy and distribute it to customers. Under Mayhew's plan, Missouri utilities would have to sell off their power plants and other energy producers would be able to enter the market. The idea is that breaking up the monopolies would create competition and curb rising prices. Things like this seem theoretically appealing, but the details can get pretty complicated pretty quickly. John Kaufman is an attorney with the Consumers Council of Missouri, a group that advocates for affordable utility rates for residential customers. He says this sort of free market for electricity can actually lead to more volatile prices. It's not as simple as just saying, let's just say, let's just say, let's just. just release everyone to the marketplace, and the marketplace will take care of things. Power companies argue that restructured markets can also come at the cost of reliability.

Rob Dixon is a lobbyist with corporate utility Amerin, which operates in both Missouri and in Illinois' restructured market. Dixon points to what happened in Texas during a 2021 winter storm, when temperatures drop to extreme lows, resulting in widespread power outages and astronomical electric bills. Generators failed their state, and Texans played the price. And we don't want that to happen here in Missouri. Approximately 13 states have what's called restructured or deregulated utility systems. Much of that deregulation took place around 30 years ago.

States that have restructured and have quality retail competition have seen prices go up far slower than states that stuck with their vertical. and integrated utilities. Kent Chandler is an energy policy researcher at the R Street Institute and the former chairman of the Kentucky Public Service Commission, the state government agency that oversees utility rates. Chandler says the tools available to most utility regulators are insufficient to protect consumers against the drawbacks of a monopoly system. In my best day as a regulator, I still couldn't hold a candle to the sort of forces, for good that competitive markets can create.

In Illinois, deregulation followed years of consumer frustration with spiraling electricity prices, says Sarah Moskowitz, executive director of the state citizens utility board. It's a move that made a lot of sense at that time, you know, but I wouldn't say it's a panacea for anybody. Moskowitz says the dream of shopping around to find the best deal on energy worked, at least for the state's largest electric consumers, such as manufacturers. It's definitely not so easy for the small energy user, someone with just a houseworth. Moskowitz says in states that have restructured, freedom of choice has not yet reached all customers. I'm Janer Roos Schleis for Marketplace.

This final note on the way out, the quote, oh, the day goes to Jay Powell at that talk he did up at Harvard that I mentioned at the top of the broadcast. Confidence, the Fed Chair said, is what you feel before you really understand the problem. Good life lesson there, no. Amir Bimbawe, Caitlin Esch, John Gordon, Noia Carr, Steve Mullis, and Stephanie Seek are the Marketplace editing staff. Kelly Silvera is the news director. I'm Kai Rizdal. We will see you tomorrow, everybody. This is APM.