Chapter 1: What economic factors are influencing the U.S. dollar's strength?
Just because it does bear repeating, the economy does not stop when headlines turn elsewhere, you know. Also, and completely unrelated, we're going to talk a little television on the program today from American Public Media. This is Marketplace. In Los Angeles, I'm Colin Risdell. It is Wednesday. Today, this one is the 4th of March. Good as always to have you along, everybody.
There are some things happening in this economy, ours and globally, that make good sense. Oil, for instance, spiking. We all know why. Gold, though off its highs right after the war started, still up a lot. The U.S. dollar since Saturday morning very much in demand, which means it's been strengthening relative to other currencies.
All of the above are par for the course when geopolitics goes haywire. Where things are getting strange, though, where that flight to safety paradigm that we are so very used to seems to be breaking down is in the market for U.S. treasuries, the safest of safe havens. You would expect investors to want more of them, just like they want more dollars. But no.
Marketplace's Justin Ho is on the what the heck is going on here desk for us today. When investors want to pile into the safety of the U.S. dollar, they have plenty of options. You could find a money market fund that's a relatively safe place to go to. Brendan McKenna with Wells Fargo says investors could also park their money in corporate bonds, which you need dollars to buy.
Same with mortgage-backed securities. You could park it in just a savings account, right? And you're relatively safe there. Investors have been considering these options because they're not exactly thrilled about investing in U.S. treasuries right now.
Sebastian Malaby, senior fellow at the Council on Foreign Relations, says between the president's tariffs, his attacks on Federal Reserve independence, his intervention in Venezuela, and now Iran... You just have this series of ad hoc policies that undermine the idea that there's a stable hand guiding the system. And when you don't believe that anymore... you're not going to want to hold U.S.
government debt because you don't trust the U.S. government. But Malabi says investing in Europe or Asia is looking risky too, especially since the war is making energy more expensive. Both the East Asian economies and Europe are big energy importers. So a spike in the cost of energy is very, very bad for them. Compared to that, the U.S. economy looks relatively more stable.
Christopher Vecchio, head of futures and FX with the research company Tasty Lives, says investors are basically just sitting on their dollars. If you are someone who, for example, is in Europe, and this really is more of a question for foreign investors and traders. I may sell out of my U.S. treasuries and instead of converting the money back into euros, I could just keep them in U.S. dollars.
Vecchio says no matter what investors think of U.S. treasuries, the dollar is always going to be in high demand because the global economy runs on dollars. I'm Justin Ho for Marketplace. On Wall Street today, traders did what they do sometimes. When things go haywire, they're going to ignore anything that's not right in front of their noses. We will have the details when we do the numbers.
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Chapter 2: How do geopolitical events affect U.S. treasury investments?
So we're not there yet. And, you know, I think that's why you've seen this very muted market reaction so far. But, you know, the million trillion dollar question is how long does this last? Well, let's go there for a minute. And I'm not going to ask you how long this is going to last. But but I I need an expert.
And you're the expert in this conversation to talk to me about about the cascading effect. The longer it does last. I mean, the president is talking about four to six weeks, you know. And that's – I hate to use the word manageable, but every single analyst note in my inbox right now says that if it's four to six weeks, it's a manageable hit to the U.S. economy.
It's probably a different calculation for Europe and Asia. But the question, I think, that begins to transition when we get to something like $90 oil is – you get these feelings that we're back to that dreaded summer of 2022 when inflation really spiked. That's the last time we really saw gas and oil in that $100 a barrel mark.
And so that's, I think, what you're really worried about, whether you're the Federal Reserve or whether you're a corporation trying to assess this, is If we get to a place where companies and consumers really start to change their assessment of what they think the next several months are going to be, it's not happening yet. Right, right. Last thing, and then I'll let you get back to work.
The phrase supply shock is being bandied about because it's not just oil and gas and it's not just the Strait of Hormuz. Insurance for shipping is going up. There's general unease out there. That's a real worry, right? This idea of a supply shock now into this economy. Yeah, that's a really good point.
The flip side of that is that we had an oversupply, arguably, of oil and gas in the market coming into this, and that most other parts of the economy were pretty well supplied. So you're starting from a much better base than, say, what happened in 2022 when we were coming off a period of where there still wasn't enough supply of cabinets or toasters or auto parts or whatever. But you're right.
Again, if this is something that lasts for months, then you're back to 2022. Heather Long at Navy Federal. Heather, thanks a lot. Always good to talk to you. Thanks, Guy. As Heather and I were just talking about, this war is already starting to be felt in this economy.
But as we're also talking about, there are things that are going to hit right away and there are things that are going to take a while. On that latter list of things that are going to take a while is the labor market. The February jobs report comes out on Friday, and we did get something of a preview today.
Payroll processing company ADP says private company hiring jumped last month, 63,000 new jobs also, and not for nothing, pay was up about 4.5% year over year. Marketplace of Carla Javier reads the tea leaves on that one. All this jobs data is really important, says RSM chief economist Joe Brusuelas.
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Chapter 3: What insights does Heather Long provide on inflation trends?
A couple of things. Medical drama, sure, yes, that's the way you guys are doing it and thinking of it. For my money, for the program I work on, it's a workplace drama, right? These people are doing a job. Yep. And we never go home with them. Well, that's the thing I wanted to ask you about. You only see them in the workplace. Yeah. How come?
Because I think that's your experience when you're in the ER. You don't know what that doctor had for breakfast. You just show up and you hope to God he's going to save you. And I think it made it much more realistic, much more immersive.
We really wanted to focus on the emergency department and not so much on the doctors, of course, but only in their work environment because that's where we see them. Speaking of doctors, you have a lot of them. I do. On set, on staff? Well, we have one on set every day, but we rotate them out. So we have four or five that rotate out because they're all working.
So they have to do the real medicine when they're not doing our fake medicine. And then this year we'll have three doctors in the writer's room. And that makes it so authentic is because we're working with real doctors all the time. And we are also working with experts and other doctors, especially this time of year. We're just starting season three.
We talk to a lot of experts in the medical field about anything that's coming up. Are you writing it or shooting it? We're done shooting. And today we have our first writers meeting today for season three. Do you still write? Oh, yeah. Yeah, that's the best part of the whole job.
I read somewhere that you sleep like 8 at night to 2 in the morning and then you get up right in the middle of the night. Is that true? Yeah, I do a biphasic sleep cycle. Really? Yeah. I guess it works. It works, yeah. It happened during hiatus. I was not sleeping well and I was getting really pissed off. And so I was like, if you're going to be up, you're going to work.
And I actually got a lot of work done, went back to bed, woke up, started my day, had a whole day's worth of writing. I mean, you look pretty good. I feel okay. I fall asleep driving here sometimes, but other than that, it's okay. Part of what makes this show work is the versatility, right?
Obviously, the medical stuff and the injuries, and you see it all, and you guys have done a great job with prostheses and all that jazz. But there's AI in season two, and there's the Medicaid cuts in season two. There was the measles outbreak, right, in season one, which you guys were, I think, ahead of happening in actual real life. Yeah.
Clearly, you're thinking about real-world stuff as you write this show. Well, what happens when we talk to the experts, regardless of what field of medicine they're in, we talk to them about what scares them, what keeps them up at night. And then when we extrapolate where things were going, being in the head of the measles epidemic was not being overly prescient. It was just...
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