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Marketplace

Services stall as manufacturing booms

22 May 2026

Transcription

Chapter 1: What does the latest Purchasing Managers' Index reveal about the economy?

2.039 - 28.227 Kai Risdahl

On the program today, a theory about this week in this economy. We'll talk live music and small clubs. And hey, is that a Wilson's warbler I see up in that tree? From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizal.

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Chapter 2: How is the manufacturing sector performing amid rising input costs?

28.247 - 46.212 Kai Risdahl

It is Friday today, the 22nd of May. Good as always to have you along, everybody. I'm just going to say this, and then we'll see what Courtney Brown, she's at Axios, and David Gurley, he's at Bloomberg. We will see what they have to say about it. I think this was a deceptively significant week in this economy.

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Chapter 3: What challenges is the services sector facing currently?

46.813 - 51.399 Kai Risdahl

We'll see what they say. Welcome to the program, you two, on a Friday. Hello. Hey, Kyle.

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51.419 - 52.48 Courtney Brown

Hi, Kyle.

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Chapter 4: How does birdwatching contribute to local economies in Northwest Ohio?

52.5 - 61.814 Kai Risdahl

All right, Courtney Brown, you get to go first. Here's my theory. The 30-year tops 5%. People get really worried about that. Fed minutes come out the other day.

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Chapter 5: What creative strategies are independent venues using to survive?

61.854 - 70.087 Kai Risdahl

They show clear signs that an interest rate hike might be next. Forget a cut. Forget holding. They're thinking about hiking. Chris Waller gives a speech.

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Chapter 6: How is consumer sentiment affecting spending behavior?

70.127 - 79.161 Kai Risdahl

Fed governor gives a speech today to the title of which is Policy Risks Have Changed. And oh, by the way, Kevin Warsh takes over today at the Fed. Discuss. My theory, please.

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80.002 - 93.245 Courtney Brown

Yeah, it's like almost everything that happened this week in macro world pointed to this idea that rate cuts, which, you know, Kevin Warsh is under pressure to deliver.

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Chapter 7: What are the implications of rising inflation on the economy?

93.305 - 111.949 Courtney Brown

The case gets harder and harder to make. It's like every day this week through Friday, the case got harder. harder to make. And it all culminates in that speech that you mentioned from Fed Governor Christopher Waller. Remember, he was basically on the front line of arguing for a rate cut not too long ago.

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Chapter 8: Who is Kevin Warsh and what changes is he expected to bring to the Fed?

111.969 - 120.359 Courtney Brown

Totally changed his mind because of the inflation data and other economic indicators that have come in this week. So I buy into your theory, Kai.

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120.799 - 124.183 Kai Risdahl

All right. David Gurra, join the club. Come on on board with my theory.

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125.024 - 144.223 David Gurra

Yeah, I mean, it was a busy week, a lot of signal moments. You know, I think we had a great piece at Bloomberg this week looking at what we've seen in terms of long-term yields and the fact that manifest in all of that is this fear that inflation isn't coming down anytime soon. Yes, the war in the Middle East is contributing to that, but there are other factors at play as well.

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144.904 - 163.887 David Gurra

And I think you're right to cap it off with what we saw in the East Room of the White House today. That's Kevin Warsh being sworn in to the Fed, now the chairman. inheriting a very difficult, a very difficult job. I don't envy him. I think the president made a joke about that as well, that it's, you know, there are easier jobs than the one that he faces here.

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163.907 - 183.212 David Gurra

And I think that remove that he had, the fact that that ceremony took place in the White House was probably a nice thing because it was a bit more of an extended diversion from the fact that when he gets back to the Fed, if he wants to do all that he said he wants to do, implement all the reforms he wants to do, do what the president wants him to do, which is agitate for cuts, that is a harder and harder mission for him to try to accomplish.

183.867 - 193.978 Kai Risdahl

Getting harder every day. And consumers and also the markets, Courtney Brown, are thinking inflation is going to be higher for longer. And we know what happens when expectations become unanchored, right?

195.239 - 204.109 Courtney Brown

This is something that, again, referencing Governor Chris Waller, who, you know, we should just say is an influential member of the Fed board.

204.229 - 207.312 Kai Risdahl

He was nominally in the running to be the chair. Could have been the chair.

207.692 - 224.516 Courtney Brown

Oh, that's right. Who could forget? So he mentioned this idea that inflation has been stuck over 2% for some time now. And he gave this fantastic analogy of a coin flip to describe how consumers might start thinking about inflation.

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