Marketplace - Warsh wants to keep markets guessing. Will it work?

Episode Date: June 18, 2026

Kevin Warsh held his first press conference as Fed chair on Wednesday, and — unlike his precedessor — did not say what the central bank plans to do next. Despite his tight lips, markets read between the lines and predict a rate hike is coming soon. In this episode, why Warsh is rewriting the Fed’s communication style, and how it could alter the economy. Plus: Jobless claims tick down a bit, GPS shapes global infrastructure, and RV owners struggle to sell their vintage digs.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 today’s stories:Unemployment is still low, but so is hiringFed Chair Kevin Warsh is trying to keep his options open. Investors are parsing his words anywayGPS is a pillar of the global economy, and it's also pretty vulnerableUsed RV sales are up, but many large, older rigs are sitting on lots for months

The economy is changing at a dizzying rate. Entered the chart topping and critically acclaimed managing the future of work podcasts from Harvard Business School hosted by me, Bill Kerr, and by managing the future of work project co-chair, Joe Fuller. The show explores workforce development, technology trends, demographic changes, and many other forces transforming the landscape of work. Follow the HBS Managing the Future of Work podcast wherever you get your podcasts. Coming up on the program, today we'll talk about the geopolitics of this economy.

We'll talk about the risks and rewards of GPS. And we'll talk about the RV market as economic indicator. From American public media, this is Market Plans. In Los Angeles, I'm Kyle Risnell. It is Thursday. Today, this one is the 18th of June. Good as it always is to have you along, everybody. You know, sometimes there's just a lot of economic loose ends out there waiting to be tied up.

So that is what we're going to do to get going today. And we're going to do it with Robin Brooks. He's a senior fellow at the Brookings Institution. Welcome back to the program, Robin. Good to have you on. Hey, Kai. Thanks for having me. So, let's see, there is an agreement to begin negotiations in pursuit of a deal in the Middle East.

And thus, I want to start today with you. And oil, Brent is at $79 a barrel, just a hair. under 80 bucks. But the straight is still closed. It is going to take some time for things to get to get back to normal. Crystal ball this for me. Would you, what happens with oil markets? You're an oil guy. So let me say two things. I think one thing that's really, really important about this shock that we've kind of learned is, you know, think back a couple weeks or months, there were a lot of scare stories about oil going to $150 or $200 a barrel. That didn't happen. And I that's really important. Here, if you think back to before the war, then we were around

$60, $70 a barrel at $79. I think there's very little risk premium priced. I think we need to be in a range of $80 to $90 a barrel until ship traffic fully resumes until oil tankers start moving. So I think markets are getting a little bit ahead of themselves on their optimism. Tell me why risk premium here is important. Why? In effect, if I heard correctly what you just said, oil needs to be a little bit higher. Yeah, so obviously, as you know, the Strait of Formuz is a critical artery for global oil markets. Before all this started, 20 million barrels of oil per day and product moved through the straight. We are a long way from that number.

before all this began, there were about 100 ships every day that went through the Strait of foremost, about 50 west to east and about 50 east to west. Ship traffic, unlike all the previous ceasefire agreements that we've seen in recent weeks, ship traffic is picking up, but we're still in the tens of ships, not hundreds. Yeah. You know, I read you on something. stack from time to time and I'm following on the socials. And you have been through this whole crisis, sanguine that oil prices were not going to go completely haywire. And I guess I wonder why that was because everybody in the world was like, oh my God, $200 barrel, $200 a barrel, you know. Well, thanks so much for being a subscriber of my substack. You're probably the single most important

subscriber ever. So thank you. So there's something important here, which is, I worked a lot on Russia and Ukraine back in 2022. And at the time, we had a lot of scare forecasts. Oil at the time, according to one investment bank, was going to go to $400 a barrel. And so I spent a lot of time digging into how these forecasts are made. And it just didn't add up. And it's the same this time around. You had scare forecasts of $150 or $200 a barrel.

If you run the numbers, which I did back in March, the max number. you get is $125, and that's basically where we topped out. And this is basically huge validation of the economic, academic research that we have on how will markets work. And it kind of invalidates the scare stories that you hear. So my bottom line is steer away from the extremist forecasts. They are usually tail risks. The phrase you're looking for here, gang, is a price elasticity of demand. I've got 30 seconds for this next answer, Robin, which is not fair to you, but a very quick characterization, if you could, of the new era at the Federal Reserve under Chairman Warsh. 30 seconds. So my best guess is that we will have a Fed on hold. We will have much less forward

guidance and a smaller balance sheet. Simple, cleaner, more efficient. Better? and more volatile, maybe better. We'll see. Okay. All right. We'll take that. Robin Brooks at the Brookings Institution. Thanks, Robin. Good to talk to you. Thank you. Wall Street on this Thursday, you know, as often happens on the day after a press conference for the Fed and the sell-off that follows, traders looked around today and decided maybe things weren't so bad after all. We will have the details when we do the numbers. This being Thursday, we got our regular report on new claims for unemployment benefits this morning. It was maybe not good, but definitely not bad. 226,000 people filed first-time claims last week. That's basically even with what everybody had been guessing.

Big picture, as you know, the national unemployment rate sits at a historically comfortable 4.3%. Businesses do continue to add jobs. But the way the job market feels totally depends on a couple of things. Number one, with a Capital One, whether you've got a job. And number two, what part of the country you happen to be in? Marketplaces Kelly Wells is on the labor market mood desk for us today. The numbers can look good while the job market feels bad. That's Laura Ulrich's big takeaway.

Two things can be true at once. She's Director of Economic Research at Indeed. Job gains have been picking up, and it's a really tough time to be a job seeker. Ulrich calls the job market paralyzed because, yeah, unemployment's low, but so is hiring, which bummer if you're trying to get hired. There were a couple times this year where the hires rate was as low as it was in April 2020. So think about that. Like, who was hiring in April 2020? But the market feels all right if you've got a job right now, because chances are good, you're not going to lose it.

Perhaps the one lesson is if you're in a job and you even like it a little, maybe stay put for now. Michael Goldberg teaches in the School of Management at Case Western Reserve University, and he says his job-seeking students are victims of a really uncertain job market. Perhaps the most uncertain I've seen in my career. Another reason the market feels worse than the numbers suggest, they don't tell the whole story, says Michelle Evermore, with the National Employment Law Project. Initial claims doesn't measure how many people are unemployed. It measures how many people are unemployed and are able to get an unemployment benefit. So if you say quit to care for an aging parent or didn't bother to sign up for unemployment benefits because it was too difficult or too low to seem worth it, you're not counted in the report today. But some regions are painting a rosier picture. Take Ohio where I live. The unemployment rate here is 14% lower than the national average. Bejou Shah leads the Greater Cleveland Partnership, which is the Regional Chamber of Commerce.

We talk to employers every single day and everyone has that same challenge of us. I can't find enough people. Because people have been leaving the Midwest for decades, and now there's a bunch of new economic growth here, the job market's just a bit less frozen. Shaw says Ohio companies are sending recruiters to other states. That they feel are rich in talent, but have maybe a more challenging cost of living.

And workers are buying what they're selling. Ohio's Department of Development reported that more people moved to Ohio last year than any time in the past 25 years. In Cleveland, Ohio, I'm Kaylee Wells, Marketplace. Monetary policy, Milton Friedman once said, operates with a long and variable lag. Chairman Warsh said a version of the same thing yesterday in his press conference, even as the central bank held interest rates steady.

The other thing that happened at that presser was what didn't happen, Warsh giving no hints, no forward guidance, about whether an interest rate hike might be common. But as happened sometimes, and as might happen, more now that there looks to be less communication coming from the Fed, markets have made up their minds. Traders are thinking there's going to be at least one quarter point increase by the end of the year. Marketplaces Kristen Schwab made some calls. At the Fed press conference yesterday, Kevin Warsh forced us to read between the lines a bit. Persistently high prices are a burden for the American people. But the recent past need not

be prologue. I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability. The markets took that to mean a rate hike is coming. But Randy Crosner thinks markets got it wrong. And he has a pretty good understanding of how the new Fed chair thinks. I mean, I know Kevin well. The two worked at the Fed together a couple decades ago. The market's interpreted that, well, he's going to be a real hawk. But I don't think that was exactly appropriate. Traditionally, markets react to what the Fed says.

Kevin would like to replace that with they should react to the data. Data on inflation and the job market. The question is, and just stick with me here for a second, if the Fed encourages markets to interpret the data, will the markets really just interpret the data? Or will they instead make guesses about how the Fed is quietly interpreting the data? Alan Blinder, a former vice chairman at the Fed, says the distinction matters. The argument for a more talkative Fed is not that we want to see these people on TV because there's such wonderful personalities.

If you can't tell, Blinder is a pro-Fed transparency guy. It's that that conditions market expectations so that hopefully the markets don't run off in crazy directions. Crazy directions can result in pretty painful market corrections. Blinder thinks we'll see one rate hike in the coming months. So does Carol a Binder, an economist at UT Austin. But she says the markets could price in more. So we would expect other rates to rise if the Fed starts raising rates, especially if markets expect like a series of rate hikes instead of a one-time rate hike.

And a series of rate hikes would have the biggest effect on longer-term loans, like the 30-year fixed mortgage. I'm Kristen Schwab for Marketplace. Coming up. She said, well, how much is it going to cost? I said, well, a quick calculation, about $10,000. Do not even tell me what the complicated calculation is. Come on.

First, though, let's do the numbers. Dow Industrial is up 72 points today. That's 10th percent, 51,564. The NASDAQ added 496 points, 1.9 tenths of 1%. 26,517. The S&P 500 gained 80 points, one and a tenth percent, 7,500 on the nose.

Markets are closed tomorrow for the Juneteenth holiday. So for the week, the four days gone by, if you will, the Dow increased 7 tenths percent. As that climbed two and four tenths percent, S&P 500 picked up nine tenths percent. Gamers have been waiting for more than 13 years for the sixth installment in the Grand Theft Auto series. They can start pre-ordering it next week,

according to that's the game's developers. Take Two Interactive, It rang up 4 and 9 tenths percent. Today you are listening to Marketplace. On all of it with me, Alison Stewart, we'll talk about art, music, theater, literature, history, food. Well, all of it. Hear in-depth, insightful interviews with authors like Zadie Smith, musicians like Steve Earle, actors like Kate Winslet and beyond.

You never know who you'll hear next on all of it. But it's always worth listening. That's all of it. available wherever you get your podcasts. This is Marketplace. I'm Kai Risdal. It happens, I don't know, millions, probably actually billions of times a day all over the planet. Somebody pulls out their phone or the device of their choice to find out where they are and how to get where they want to go.

And it happens all those billions of times without people giving it a second thought. There is a new bookout about the technology behind us knowing where we are and behind so much else in this global economy. what its future might hold. It's called Little Blue Dot, how GPS shaped the modern world. Catherine Dunn wrote it. Catherine, welcome for the program. Thanks for coming on. Thank you so much for having me. Tell me would you, how you came to write this book. You used to be an energy reporter. Is that right? Yeah. So I used to track oil flows kind of around the world. I used to work for a Wall Street Journal and the Dow Jones. And then I was working for S&P Global. And I was just sitting at my desk one day and a colleague sent me a story about a weird incident in the Black Sea.

And this was quite soon after Russia invaded Crimea. And all these ships were turning up at this Russian port, Novoro Seas, which is very close to Crimea. And they were looking at the window. They could see where they were. They were at port. But on their ship tracking, you know, sort of like a Google Maps that you were at. will use. They seem to be at Russian airports, like on the tarmac. And of course, ships can't, yeah, ships can't fly. So this was very weird. It was just this mystery that I got obsessed with.

Yeah, and I just got hooked, basically. Fair enough. And it makes for a good book. I will tell you. It's a great history of GPS. But also, and the story you just told, demonstrates this. this is a story of the strengths and the weaknesses of this system, right? And we're seeing that play out in virtually every sphere. It is fundamentally an infrastructure story. Yeah, yeah, it's an infrastructure story, and it's a little tricky to make an infrastructure story sort of sexy and exciting. But once you realize how deep it is in all of our infrastructure, you start to see both how transformative it was and also really how risky it is that we're now starting to see such a high level of intervention. Right. And, you know, we'll get to the risk part of it at the end of the interview. But am I overstating things to say, you know, globalization came out for a whole lot of reasons. But GPS now, certainly in modern globalization and modern economy, it's kind of a critical factor. Yeah, I would say it is a critical factor. And you have to look at the way it's, it really converged with a lot of other things that were happening around the same time when it was bursting onto the mainstream, sort of consumer.

infrastructure world through the 90s and through the 2000s we're entering the era of the smartphone. But one of the ways it was really transformative that people often don't know about and it's pretty trippy is the way it underpins time and the way digital time has to be really in sync in order to make all these systems stitch together in order to make them agree with each other on what time it is.

And our electricity grids, our mobile base stations, are stoplights, anything digital actually. Huh. I didn't realize the stoplights thing. So let's get back to the risks involved with GPS now. And as you said at the beginning of this conversation, the mysterious ships on the airport tarmacs. There is spoofing and there is obviously some manipulation of GPS signals now. Talk about where we are with those risks and how intertwined it is with the global economy and with virtually everything we do.

Yeah, so it's definitely we've seen them rising. Anywhere that there is conflict or there is the threat of conflict, weird stuff has been happening with GPS. You know, we've got Russia, Ukraine, and we obviously have Israel, Gaza, that whole region, and then you get to Iran. You've had all of this in the Strait of Hormuz, which if you've seen a map lately, you've realized it's very, very small and a lot can go wrong. So we're at the point now where there's sort of this wall, at least through the Middle East and sort of Eastern Europe, Eastern Mediterranean, where there's just so much interference that if you're flying from the U.S. or Europe to the Middle East and Asia, you're going to go through it. I think a lot of people in that world, they really do believe it is a bit of a disaster waiting to happen. For aviation, it's important to say that there are lots of backup systems. Backups. Aviation is very safe. We should say that. Yeah. Yeah. Yeah, exactly. But it's not something you want to be failing at this scale.

So let me bring it down to the human scale and the little blue dot of your title. We all stare now at our phones when we're mapping or would have you and there is that little blue dot on the phone that tells us where we are to within, I don't know, six feet, 10 feet, 20 yards, whatever it is. this system has kind of changed the way we interact with the world. Is that too much? What do you think? It's definitely changed the way I interact with the world. People have been asking me, oh, did writing this book change your relationship with GPS? Do you use a map now? And I'm like, no, I walk around like an absolute lemming.

You know, it hasn't changed anything because I'm so dependent. And for me, it's been transformative. I don't know anybody. Transformative in a good way or a bad way? It's hard. I mean, it's hard to say, right? It's an amazing, elegant system. And we're not going to throw out GPS and stop using it.

That's not going to happen. I think we've just forgotten that it's one system and it can fail like any other. It's a book called Little Blue Dot by Catherine Dunn. Catherine, thanks a lot for your time. I appreciate it. Thank you so much for having me. Here's a story about the summer. travel season, discretionary spending, high gas prices, and the joy of hitting the open road

all rolled into one. For those whose preferred mode of transportation is the RV, this is a tale of two industries. Sales of new RVs down nearly 17 percent. Used sales up 6 percent year on year. But if you've got one of those really big RVs that you're looking to unload motor coaches, I think they're called, you could be waiting a while to sell it. Cori Young reports. A refurbished 1988 vintage motor coach Lindsay and Blake Walters bought used in 2024 has served its purpose. This is a full-sized jacuzzi tub, which is so funny that you would see that in a little RV, but we love it. The couple and their two boys lived the RV life while building a home in Fairhope, Alabama.

The plan was to save on rent, then resell the rig to someone else who might want to do the same. In January, the Walters scrubbed their RV inside and out, then listed it online with social media videos. Five months later, there's been a lot of interest requests for those videos, questions about those videos, but no follow-ups. Well, the Walters RV is older than most. The time it's taking to sell is in line with Class A motor coaches built before 2016. Class A's are the big bus-like RVs. Those 10 years and older make up roughly, 40% of the used Class A motorhomes on the site RV Trader, the leading online marketplace for new and used RVs. And they're expensive, with some selling for more than half a million dollars. RV traders, Juliana Baina, says, in today's economy, buyers are watching their leisure dollars.

They are ready to buy, they want to buy, but they just can't make the math work. Or the cash. That's where financing comes in. But Baina says many banks don't want to finance RVs older than 10 years. That wall is kind of coming into play in the biggest obstacle that a lot of shoppers are seeing right now. And then there's the price at the pump. Many Class A motor coaches can hold 100 gallons or more. Current fuel prices haven't caught up with the sales data, but they're factored into those leisure dollars. Michael Papa knows about that. He and his wife own a 2015 40-foot rig they bought used during the pandemic. We have a Honda CRV will pull behind, and You know, if the terrain is not real mountainous, we get about seven miles to the gallon.

It doesn't sound great, does it? It does not. Papa recently told his wife, high diesel prices mean fuel for the couple's upcoming cross-country trip from Alabama to the Pacific Northwest is far more expensive than planned. She said, well, how much is it going to cost? I said, well, a quick calculation, about $10,000. The economy isn't the only roadblock. Some buyers are wary of the unofficial 10-year rule. That's the age limit at which some campgrounds won't allow RVs,

as vintage RV owner Blake Walters learned. So I figured I'd buy an old RV that was more affordable that I could work on easily, and then we ran into the old RVs don't fit in all RV parks. Walters is now paying $50 a month to store the RV. With no bites, he's willing to make a deal to get it off the lot. With so many older RVs on the market, Baina with RV Trader, advises offering potential buyers a mechanical inspection report, budgeting for the long haul, patience, and...

Maybe take a few last trips before you sell it because it's going to be a little bit of time and summer's right here. With the high price of fuel, RV owners might want to take those trips closer to home. In Fairhope, Alabama, I'm Corey Young for Marketplace. This final note on the way out today in which it seems an $85.7 billion initial public offering just ain't enough for SpaceX. Bloomberg reported this morning that the rocket slash artificial intelligence slash social networks slash satellite internet company is going to float a new bond issuance looking for another $20 billion. SpaceX says its debt has gotten investment grade ratings from the three big ratings agencies. The company's latest financials say SpaceX lost almost $5 billion last year on just shy of $19 billion in revenue.

Ticker SPCX off 4% on the day. Our daily production team includes Andy Corbyn, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. Will Story is the supervising senior producer. And I'm Kai Rizzdahl. We will see you tomorrow, everybody. This is 8 p.m. I'm Amy Scott. host of How We Survive. And this week, we head to Europe to learn more about carbon capture

with our friends from the DW podcast, Living Planet. In Europe and particularly in Norway, they've used carbon capture since the 1990s to reduce their emissions. What's different in Europe, particularly today, is that the same technology of capturing CO2 is being used to then bury that CO2 underground in what's called CCS. carbon capture and storage. And while there's potential in this technology, some worry about fossil fuel companies investing in carbon capture instead of renewable energy. Join us as we follow the life cycle of carbon dioxide, from its release at a cement plant in Norway to where it's captured and buried under the North Sea. Listen to how we survive on your favorite podcast app.