Marketplace - What would make Kevin Warsh consider a "Fed put?"

Episode Date: July 1, 2026

It’s unclear what Federal Reserve Chair Kevin Warsh will do regarding interest rates, but would a “Fed put” actually help promote stability in financial markets? Also in this episode, we look at why fewer teens are getting paid jobs, a decline in single-family homebuilding, prediction markets for natural disasters, traffic expanding way beyond rush hour, and the booming cowboy boot market.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.

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. All right, fine.

We'll tell you what Kevin Warsh is thinking, but it's going to take more than five words from American public media. This is Marketplace. In Los Angeles, I'm Kai Rizdahl. It is Wednesday, today the very first day of July. It is always to have you along, everybody. We begin in Centra, Portugal, not far from the capital of Lisbon, but a bit out of the way, perhaps, to be the center of global central banking. That, nonetheless, is where Federal Reserve. Chairman Kevin Warsh and his international colleagues found themselves today for a regular confab

on the state of the economic world. Warsh at one point was asked about the risks that he sees out there right now. I'm not prepared to sort of make a broad comment denoting risks that are available in the system, but I will say this. This is the biggest time of consequence to each of our economies, I think, in our lifetime. The global financial crisis of 2008 would like a word. but Wors cited AI, persistent inflation, geopolitical dyspepsia, and the low, higher, low-fire, labor market as some of the things he is keeping an eye on.

At his first press conference a couple of weeks ago, Worse said he's also keeping an eye on Wall Street, and that is where we're going to spend the first couple of minutes of the program. Financial market prices are probably the most important source of information to guide central bankers. So that was a couple of weeks ago. The relationship between the central bank and the financial bank and the financial, financial markets can be tricky. The Fed doesn't want everybody to think it's worried about asset prices in the lingo. But also if those asset prices take a dive, everybody starts getting

economically nervous, which gets us to something called the Fed put in its original iteration, the Greenspan put. So the Fed port dates back essentially to the start of Alan Greenspan's 10 year as Fed chair. One thing that he did was, or allegedly did, was in response to stock market grasses, intervened in the Fed liquidity markets pretty heavily. That's Jaykadia at the Cato Institute. Liquidity, just a fancy word for companies being able to get their hands on ready cash, put just an investing term for a way to cut your losses. So, 1987, October, Black Monday, the Dow drops 22 and a half percent in a day.

Alan Greenspan two months into his chairmanship. The Fed responds, as Jayquedia said, by helping. big banks stay afloat and the Greenspan put was born. And then you're the dot-com bubble burst in 2001 that also led to Fed liquidity injections. And then, of course, you have Bernanke become Fed chair and then has to deal with the financial crisis. And the Fed has stepped in to help markets and calm markets. That was the Bernanke put.

There was the Powell put during the pandemic. Think about what was happening in the markets back then? They are saying, oh, if markets are signaling something or could amplify something that is going on in the economy, then we should take it seriously. That's Anna Cheslack at Duke University's Fuqua School of Business. Here is J.Kedia one more time with the however comma. The stock market crashes and falls all the time, right? The stock market fell, for instance, last year once you had President Trump imposed

wide-scale tariffs. But that was not something that the Fed immediately came in and tried to fix. So the question now with a new Fed chairman is what, in his mind, is going to qualify as serious enough to merit a Warsh put. Wall Street on this Wednesday, the markets, if it were, traders seemed a bit subdued. TBH will have the details when we do the numbers. With the observation that we are going to get the June unemployment report tomorrow,

a reminder here that the Bureau of Labor Statistics aggregates a whole bunch of different data sets in that report. The data set we're interested in right now is young job seekers, 16 to 19-year-old. for whom the unemployment rate has sharply diverged from the national number, going up steadily the past couple of years, from just over 10% in May of 2023 to nearly 15% in May of this year. Meanwhile, over the past several decades, another thing has been happening in the teenage labor market. Far fewer of them have been working or looking for work.

Back in the 1980s, about two out of every three teenagers had paid work in the summertime. That's down to around one in three. of late. And that long-running decline in teen employment, as Marketplace of Mitchell Hartman reports, has consequences for the whole economy. I met Nick Berka at Coney Island Beach on a windy Saturday. He's 31 and says growing up on New York's Upper East Side, he had one job. I babysat my upstairs neighbor. And how many times did you do it? Just once. It was kind of a disaster. This kid was really intense and a little scary. I didn't get paid, and I just never went back.

In fact, like many in recent generations, he never had a paying job as a team. In college, Burko worked as a computer science tutor. Today, he runs a small software nonprofit. But he feels like he missed something. I think all of the people I know who worked seem more responsible than me. We'll get to more consequences a bit later, But first, why are 35% of teens in the workforce now compared to around 60% back in the 1980s?

This is a decision of labor supply. Fewer teens are looking to participate in the workforce. Hillary Wething at the Economic Policy Institute says part of the reason is a sharp rise in the number of teens headed to college. They just have more competing priorities than previous generations. extracurriculars, college prep, academic programs, or internships. For middle and upper middle class parents, these options may make more financial sense than pushing their kid to get a minimum wage summer job if it helps them get into a better college or land a scholarship. For lower-income teens, I think says, a lot of summer employment opportunities have dried up

since a key federal jobs program for youth was weakened in the 1990s. Students for which maybe college is not possible benefited the most from something like a federal jobs program in their area. Now that doesn't exist either in certain parts. There's also been a decline in demand for teen workers, says Peter Capelli at the Wharton School. Employers are just not as willing to take on new people even in the summer. Also, employers can now use staffing agencies to find temps and seasonal workers without tapping. the teen market, says Carl Van Horn at Rutgers Center for Workforce Development. All things being equal, you'd rather hire a somewhat older person. There's queasiness or

concern on the part of some employers about hiring young people who, there may be insurance issues, perceptions about what young people are like. Such as always on their phones, not showing up on time, or at all. Manny Rodriguez has a front row seat for all this. He's the founder of Revolution workshop, a nonprofit on Chicago's South Side that promotes skills training for young people in manufacturing and the trades. And here's what he's been seeing for years now. Those numbers are in decline, youth engaged in sports, employment opportunities, anything that has them leaving the house and away from a screen. All this makes his job harder. It is a problem when we're getting them right out of high school, trying to make them job ready,

teaching them good work habits, what it is to hustle and communicate and how to take constructive criticism. And I would tell you, with the trades, it's attendance, just getting people to come on time and stay off their phones. The decline in teen work is particularly damaging for the demographic groups Revolution Workshop tries to serve, says Carl Van Horn. Having fewer job opportunities is especially difficult for lower income individuals. Are stigmatized. They don't have the connections. They don't I have the money that disadvantages them. Because finding entry-level jobs, then move up jobs, and eventually embarking on a career path, will likely start slower and take longer, reducing future earnings, retirement savings, and alike. I'm Mitchell Hartman for Marketplace.

The Census Bureau reported this morning that overall construction spending in this economy in the month of May was down year-on-year. If you dig a little bit, you'll find spending on single-family home construction was on. off 4% from May a year ago. So with months of war-driven economic uncertainty and mortgage rates in the sixes seemingly in charge, Marketplaces Elizabeth Trouval calls some home builders. Affordability is a challenge for home builders. Robert Dietz with the National Association of Home Builders says that's a result of some major headwinds. Ongoing elevated mortgage interest rates and elevated price-to-income ratio. But there are bright spots like Midwestern markets.

Will Ruder is with the Home Builders Association of Greater Kansas City. Homebuilding permits are up in Kansas City year over year. Anything under $500,000 in the Kansas City market is still moving with a relatively quick pace. He says there's a lot of demand in the area and available land. On both kind of the greenfield, new development side, as well as the redevelopment side. Meanwhile, in Richmond, Virginia, people are moving to the area, but new home sales are lacklusters, says Dana Markland with the Home Building Association of Richmond. It's the result of an affordability ceiling we've hit. We have a scarcity of land that we haven't seen in decades. For Minnesota builder Rebecca Remick with City Homes, she says things are picking up for builders in the Twin Cities.

We definitely had a slow spring. She says land and construction costs are high. Zoning is an issue, add in economic uncertainty, and it's like the trifecta of keeping people from moving forward. And in northwest Arkansas, E.J. Johnson runs the Lance Johnson Building Company. He says back in the beginning of the year, he was looking at a nice selling season. Then we decide to go to war. We're still moving houses, but we're not moving at the rate that we should be today. He says after the war started, mortgage rates jumped, as did the cost of transporting building materials like lumber. I'm Elizabeth Troval for Marketplace. Here's today's marker, not that we necessarily needed another one, that late-stage capitalism is the gift that keeps on giving. Prediction markets, it seems, have entered the natural disaster business.

You can now bet on the probability of tornadoes and earthquakes and hurryings. hurricanes. Some new reporting out from high country news also shows that there was, briefly, a prediction platform focused just on wildfires in California. Its tagline, and I am not making this up, was you can't predict fire, but you can trade on it. Ethically murky? Yeah. Also, though, possibly useful. Marketplaces Caitlin Tan has more. When Caitlin Trudeau read that people are betting money on how fast wildfires might spread and what cities they'll reach? Honestly, my first reaction was, that's gross. Just yesterday, Trudeau's friend in El Dorado County, California, was almost evacuated

after a fire broke out. That's the human cost. On the other side, people just like callously, kind of coldly betting on their phone about, you know, whether someone's house is going to burn down. She worries it could lead to people's starting fires to make more money. But one could flip that argument. Coleman Strump is an economics professor at Wake Forest University. If you could incentivize enough people to clear brush and take preventative actions, you could use these markets and bet on that as well.

It's just another way markets can potentially change behavior. And with natural disasters, prediction betting could act as an informal type of insurance. Robin Hanson is an economist with George Mason, University. If I had a beachfront property or something where there was a flood risk, then I might consider that because it actually tends to be pretty hard to get flood insurance. Another possible benefit, prediction betting could help forecast where wildfire might spread. Yeah, but we already have that. We already know. Craig Clements leads a team that does that kind of forecasting at the Wildfire Interdisciplinary Research Center. It gets very complicated, very quickly when we're trying to model

fires and mountains terrain and complex fuels with changing weather patterns. And he's not betting that people using Kalshi or Paulymarket are doing all that work. I'm Caitlin Tan for Marketplace. Coming up. Worth the investment, worth the money. Could run a marathon in these things. I mean, if you had to, I guess. But first, let's do the numbers. Down industrial is off 13 points, just less than a 10%. 52,306. The NASDAQ subtracted 173 points. That's about two-thirds of 1%. 26,040. The S&P 500 down 15 points, 2 tenths percent, 74 and 83. Facebook and Instagram parent meta is setting up a cloud computing business to sell excess AI capacity. That's according to a report from Bloomberg. Meta shares up 8 and 8 tenths percent. That helped push cloud provider core. We've down 13 and 9 tenths percent. A quarter over in Sweden has ordered Google, Google, to pay about a billion and a half dollars for a price comparison business, owned by Klarna,

rather to a price comparison of business. The payments platform accused Google of favoring its own shopping service and its search results. Clarna rang up 1% Google's parent to Alphabet, climbed one and a 10th percent. Bonds down yield on the 10-year T-note rose, 4.48% on the 10-year. You're 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. It's Charles Barkley with Wayfair. It's outdoor season, and my patio set up, that'll be ready to play. That's what Wayfair wins. Patio seating, umbrellas, and grills. All delivered, fast, and easy.

Shotwayfair.ca now. Wayfair, every style, every home. This is Marketplace. I'm Kai Risdahl. Turns out in this post-pandemic economy, you can now get stuck in traffic or find yourself in an overcrowded subway car pretty much any time of day.

Because, as Juliana Kaplan wrote in Business Insider the other day, rush hour is kind of all the time now. Juliana, welcome to the program. Good to have you on. Thank you so much for having me. Tell you what, I love, hate the title of this piece, the headline revenge of the commute. It's worse out there now than it's been in a very long time,

isn't it? Oh, yeah. I mean, I'm here in New York, and the subway has been getting pretty gnarly, too. So what's going on? I mean, clearly it's an after effect. It's an artifact of the pandemic. It's sort of a few different things converging to create this revenge of the commute. So we saw, obviously, post-pandemic or mid-pandemic migration patterns, which is a lot of people moved further away from their offices. And then at the same time, the pandemic made it so that when folks did return to the office, people aren't really doing the strict nine to five as much anymore, at least in a lot of knowledgey industries. And because of that, that means that they're able to travel at staggered times, run an errand midday, so on, which is definitely good for people's

quality of life. It does mean, however, that now everybody is commuting all the time rather than these concentrated blocks. I confess, as you point out in this piece, I'm one of those who goes out to run an errand at like, you know, noonish or something. And I'm like, where, what are all these people doing out here? Don't they have jobs? And of course they do, but they're doing exactly what I'm doing. I had thought, though, that what was going to happen after the pandemic was that all this working from home stuff was going to make the traffic lighter. And a point of fact, that is not what's happening at all. Yeah, I think you are far from alone. This is something I heard from a lot of folks that I spoke to who really like the newfound flexibility.

Sure. And I think a lot of people kind of made that like doubles bargain. Or it's like, okay, cumulatively, I'm still commuting less if I'm only going in two days a week, but I am commuting like an hour and a half. Oh, one way? Oh, uh-huh. Oh, yeah. Oh, you need to move.

I'm sorry. Oh, no, not, not me, but the people I spoke to. Oh, all right. Okay. All right. Also, weekends are now a rush hour thing? You know, that one is really interesting to me. And I think something that I heard from folks that makes sense is like, if you're running your errands at noon, as you were talking about and you're like, don't all these people have jobs, but you have a job, you don't really have to run as many errands on the weekend anymore.

And that means that maybe you have more flexibility to like do a day trip. Maybe you were running errands a little closer to your house before. And again, that flexibility is kind of this double-edged sword because it's like, okay, I'm going to. going to drive out to the beach that's a little further away or out to like the outlet mall or whatever. And now all of a sudden, everyone is doing the same thing again. So one of the solutions here, scale up mass transit. I imagine some kind of congestion pricing in urban centers, but still there's traffic outside urban centers as well. This is, I mean, it's going to be a lasting challenge because the pandemic changed the way

work, but it also changed how we get to and from work and generally out in society. Yeah. You know, unfortunately, there's not one silver bullet solution. perhaps carpooling is something we could think about, obviously scaling up mass transit. Actually, one of my own subway lines moved some of their scheduled times in the morning to reflect better the new peak commuting hours. And then, yeah, one that also came up, too, is this idea of dynamic congestion pricing. Right. So this is different than what we see in New York, where the goal of that flat tax is like fewer cars downtown as much, which is a New Yorker.

Great. It's certainly been really nice. But instead, it's to keep roads moving at a clip where, okay, if you have that flexibility and you know that maybe I can get a much cheaper toll if I do this weird time, rather than that weird time, that can keep the roads moving. A lot of folks also say this is really good for road maintenance. That's something that came up a lot as we see this record congestion. Like, the roads are getting a lot of wear and tear. But, yeah, I think also part of it, too, is maybe we just all have to get comfortable with being close together. I think that's exactly.

Yeah. We just got to get used to it. Juliana Kaplan at Business Insider. Juliana, thanks a lot. Good peace. Yeah, thank you so much. The summer dress code, by large, and in the eastern half of this country this week in particular, tends toward the minimal. T-shirts and tank tops, shorts, and sandals.

You might want to think twice about your footwear, though, should you happen to find yourself in Nashville, Tennessee? Because you're going to stand out among the tourists even more if you're line dancing in something. other than a pair of cowboy boots. And as Blake Farmer reports from WPLN, those boots are having a moment that extends far beyond Music City. There's a joke among locals in Nashville that you can spot the tourists.

They're the ones in new cowboy boots. Every girl walking around seems like they got boots on. So I was like, you want some boots? Brent Taylor of New Orleans is a good dad. So like many visitors, he and his daughter Morgan went on a little shopping spree, sprinkled among the dozens of honky talks of Lower Broadway are boot shops.

It was worth looking. I found a few pair that I like and he got them. So I've been breaking them in. At first they were painful. Flat toe, green with silver sparkles. She put them on immediately and joined the high-heeled stampede. In truth, it's not just out of towners. Kela Kessinger is a local rocking calf skin knee highs with intricate stitching. This is my first pair of like investment boots, if you will, like my first pair of like legit cowboy boots. Worth the investment, worth the money. Could run a marathon in these things. Not my first choice for 26 miles.

Though the brand she's strutting can run more than $1,000, and with boots, you're often paying for comfort. The global market for Western boots has topped a billion dollars by some estimates and is growing by nearly 5% a year. Publicly traded boot barn has surpassed 500 stores. Its value has more than quadrupled in the last five years. So what's going on? Some call it the Yellowstone effect.

Taylor Sheridan's popular cowboy drama got people dressing like they do on the Dutton Ranch. You also have the confluence of Beyonce's Cowboy Carter album that brought country music and style into the mainstream pop world. Lately, traditional country music has been reaching a wider audience. Holly George Warren is the author of How the West was worn. But here in New York City, where I am right now, there's a humongous billboard right at Times Square with Ella Langley sitting on a haybell, looking real chic in her cowboy boots. Ella Langley's hit song broke Taylor Swift's record for a female country artist being atop the mainstream charts. That kind of crossover brings attention to her style, too, though

George Warren says it's been building over the years. But the music and the look have become global, and it's been kind of a gradual process. The roots of the cowboy boot can be traced to Mexican cowboys, Vaceros, country music artist Angie Kay, who was born in El Salvador, has been a daily boot wearer since she was young and says the fashion statement is strong everywhere she performs in the Americas. The sea of cowboy boots and hats and not just Hispanic people, like every type of person, all in cowboy boots, all in hats, all in buckles. And Angie Kay can't recall the last time she played a show not in her boots. It's primarily fashion, not her boots. It's primarily fashion, not. function. But Lisa Sorrell says the cowboy boot has become the functional equivalent of the country music uniform. She's a high-end bootmaker in Guthrie, Oklahoma, who's also writing a

history of the cowboy boot. I honestly wonder what would have happened if cowboy boots hadn't become stage wear and remained visible and in the public eye for so long. I wonder if they would have gone back to being just a part of a cowboy's functional gear. You'd still have boots walking around, but not so much on stage and screen, and almost certainly not on a honky-tonged bar crawl. In Nashville, I'm Blake Farmer for Marketplace. This final note on the way out today, we started with the Federal Reserve, so shall we end.

The Fed's got lots of other jobs besides just setting interest rates, one of which is processing payments for basically the entire financial system, literally helping move money around the economy. Anyway, as part of that, they put out a report every three years about how money moves around this economy. And here's the tidbit that caught my eye. In 2024, there were 3.4 billion withdrawals from ATMs. That is down from 5.2 billion withdrawals at ATMs a decade ago, which makes sense, right? We're using way less cash. But every time we go to the ATM now, we are taking out more money. $210 per visit in 2024, $134 per visit in 2015. Inflation,

Yes, but still, interesting. I think. Anyway, our media production team includes Brian Allison, John Fokie, Montana Johnson, Drew Jostent, Gary O'Keefe, and Charlton Thorpe. Alex Simpson is the manager of media production. And I'm Kai Rizdal. We will see you tomorrow, everybody. This is APF. Business and the ways we do it are changing in ways that are both more subtle and more radical than you realize. Welcome to compound interest from Samafor Business. I'm Liz Hoffman. And I'm Rohan Giswamy. We've been covering the forces behind this revolution, but now we want to talk directly to the people driving that change.

Each week, we'll talk to the operators, the experts, and the innovators to go beyond the headlines. We'll dig into everything from hospitality companies that no longer own hotels to companies that will finance your sushi order. We'll unpack the transformation of how business and consumers engage with our economy and figure out what lies ahead. Listen to compound interest from Semaphore Business wherever you get your podcasts.