The Francis Scott Key Bridge, two years later
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What happened to the Francis Scott Key Bridge two years ago?
It is kind of a choose-your-own-economic-misadventure with this war. What are you more worried about, inflation or growth? From American Public Media, this is Marketplace.
In Los Angeles, I'm Kai Risdahl. It is Thursday today, the 26th of March. Good as always to have you along, everybody. The risks of this war come in many forms, as we know, and most of them are being covered in depth elsewhere. But for us, what we're worried about falls into two big buckets, threats to global economic growth and threats to global inflation. Along those lines, this news item today, a projection from the Organization for Economic Cooperation and Development that says short run global inflation is going to be 1.2 percent higher on average than it would have been had the past three weeks never happened. Also relevant, the OECD didn't, as in did not, raise its forecast for global growth as it was expected to, again, three weeks ago.
How is the rebuilding of the Key Bridge affecting local commuters?
So, which risk ought we worry about more?
Marketplace's Nova Safo starts us off. Before the war in Iran, the global economy was on a relatively strong footing.
With inflation around the world coming under control and growth going to be pretty decent.
Ishwar Prasad, professor of economics at Cornell, says economies have been benefiting from AI infrastructure spending and lower overall tariff rates in the U.S. after the Supreme Court struck down a bunch of them.
At one level, one could argue that it's good, if good can be used in this context, that the world economy is being hit with a negative shock at a time when it looks somewhat resilient.
That shock, of course, is the effective closure of the Strait of Hormuz. The OECD's figures underscore Prasad's point. It's projecting slightly slower global growth than expected, but still growth at 2.9%. Joseph Gagnon is with the Peterson Institute for International Economics.
I do think that we probably will not get a recession unless oil prices rise further a lot.
And that could happen if there's massive or long-term damage to oil production facilities in the Middle East. Inflation is another story. The OECD forecasts a boost to 4% on average among the world's biggest economies from higher energy prices. Ben May of Oxford Economics says the risk is that those price increases spread elsewhere.
If things like the shortage of fertilizers and the higher energy costs push up things like food prices, but also perhaps the price of some other energy-intensive goods and services.
Most central banks are likely to worry about that risk first, says Neil Shearing of Capital Economics.
Their primary concern is going to be that another energy shock and another leg up in energy prices will de-anchor inflation expectations.
As in, we'll expect more of it and create a self-fulfilling loop.
What is the current state of global inflation and economic growth?
The key ingredient in all of this, analysts say, is time. Can the Iran war end soon enough to avoid worse economic damage here and abroad? I'm Novosafo for Marketplace.
Wall Street today. I'm going to give you the taco trade update because that's what seems to be driving markets of every variety. During the session, equities were terrible would be a fair word. But 11 minutes after the closing bell, the president said on his social account that he is and this is a quote. pausing the period of energy plant destruction by 10 days to Monday, April 6th, 2026 at 8 p.m. Eastern Time. Thank you for your attention to this matter.
Why does the Federal Reserve overlook energy shocks?
End of quote. He also said the president did that the Iranians had requested that pause. A fact check on that is obviously impossible. Details on the pre-taco session when we do the numbers.
A barrel of crude oil today. Let's use the global benchmark, shall we? Brent North Sea up almost 5.5%. You're shy of $108 a barrel. But whatever the day-to-day change that we are all watching and feeling, best not to expect the Federal Reserve to do too much about it, as Chair Powell said more than once at his press conference last week. It, of course, is kind of standard learning that you look through energy shocks, looking through what we look through the energy inflation.
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Chapters
8 chapters
1
What happened to the Francis Scott Key Bridge two years ago?
0:02–1:15
2
How is the rebuilding of the Key Bridge affecting local commuters?
1:15–3:18
3
What is the current state of global inflation and economic growth?
3:18–4:01
4
Why does the Federal Reserve overlook energy shocks?
4:01–5:51
5
What are the implications of rising energy prices on inflation?
5:51–7:33
6
How is the war in Iran impacting unemployment claims?
7:33–10:21
7
What challenges are humanitarian organizations facing in the Middle East?
10:21–11:20
8
What insights did Janti Soeripto share about the humanitarian crisis?
11:20–25:18