Chapter 1: What recent events have influenced crude oil prices?
There's a lot going on right now. Mounting economic inequality, threats to democracy, environmental disaster, the sour stench of chaos in the air. I'm Brooke Gladstone, host of WNYC's On the Media. Want to understand the reasons and the meanings of the narratives that led us here and maybe how to head them off at the pass? That's On the Media's specialty.
Take a listen wherever you get your podcasts. The Fed's job was complicated enough before the war. From American Public Media, this is Marketplace. In Denver, I'm Amy Scott, in for Kai Risdahl. It's Monday, March 16th. Good to have you with us.
It is Fed Week, meaning the committee that guides short-term interest rates in this economy will meet starting tomorrow to discuss the state of that economy. We'll get its decision on the federal funds rate on Wednesday. The last time the Fed changed that rate with a quarter-point cut was December 2020.
Then we got a pause in January, and most analysts expect the Fed to hold rates steady this time, too. Marketplace's Kristen Schwab looks at why and what officials will be watching for in the months ahead. Between elevated inflation and a shaky job market, the Federal Reserve had already been setting the stage for an interest rate hold.
Former Fed Governor Randy Crosner says now with the war, the hold is basically cemented here and around the world. Almost every major central bank is having a meeting this week, and I think almost all of them are going to stay on hold. Uncertainty forces economies to stop, observe, and recalibrate, says former Fed advisor Ellen Mead.
If an oil shock or something very similar to it is short-lived, probably the best thing a central bank can do is just wait. Wait to see how long the war lasts. And wait to see how deeply oil prices affect other prices. Because expensive oil... It's a stagflationary shock. Pricey gas could make consumers pull back on other spending, which would slow down the economy.
Pricey gas could also make goods more expensive and push inflation up. Now, usually, central bankers write this kind of shock off as a one-time thing, as transitory. You know, that language has sort of been tarred and feathered, I think, by the experience during the pandemic. Back then, the Fed insisted inflation was transitory.
But it ended up peaking above 9 percent and still hasn't come all the way down to the target rate of 2. David Wessel, a senior fellow at the Brookings Institution, says the Fed has to use different messaging this time.
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Chapter 2: How is the Federal Reserve responding to economic uncertainty?
They can't count on people being so calm about inflation because we've had inflation in recent memory. If people already believe inflation is likely, it could drive more inflation. And Wessel says that possibility is enough for the Fed to be more hesitant than usual about cutting rates in the coming months. I'm Kristen Schwab for Marketplace. A surprisingly buoyant day on Wall Street today.
We'll have the details when we do the numbers. President Trump continues to pressure U.S. allies to help open the Strait of Hormuz, which Iran has effectively closed in response to U.S.-Israeli strikes. About 20 percent of the world's oil supply typically passes through the shipping channel.
The price of Brent crude closed above $100 a barrel today for the third straight trading session as the president's war in the Middle East entered its third week. For context, just a few weeks ago, that price was around $70. As Marketplace's Justin Ho reports, drivers are largely taking the recent spike in stride. But for how much longer? Economists describe demand for oil as inelastic.
When we say inelastic, what we mean is that demand doesn't change very much in response to price. That's George Perks at Bespoke Investment Group. He says energy is getting more expensive, but people can't really do much about it. What am I going to do instead? Am I going to drive less? Well, most of what I'm doing to drive, I can't really avoid. I can't avoid my commute to work.
I can't avoid picking my kids up from school or going to the grocery store. That said, there is a point where the price of oil gets so high that people actually start to pull back. But it's hard to know exactly where that is. Over $120, it really starts to bite. And as we get up to around $140, it would be a steady progression. If you got up to $150, that would really start to... squeeze things.
The middle voice was John Canavan at Oxford Economics, and that last voice was Ben Ayers at Nationwide. He says up until that point, consumers would simply face more inflation, so they'd have less money to pay for other things. Same with businesses. Maybe I just won't make one less higher or it won't expand as much in one capacity because I have to change around where my costs are.
But if oil prices break through that $120 or $40 or $50 threshold, economies around the world might stumble, says John Canavan at Oxford Economics. It'd be more likely to perhaps push the European Union or Japan into a recession. They are more reliant on the oil that is moving through the Strait of Hormuz. Canavan says a recession could happen here, too. But even at those prices, the U.S.
has advantages. For one, we produce plenty of our own oil, and George Perks at Bespoke Investment Group says the economy up until the war was doing okay. The thing about the U.S. economy is that it's very large and has a lot of momentum, and it's really hard to knock it off the trend that it's on. And so you do need a really big shock.
Perks says the price of oil might have to hit $200 a barrel to push the U.S. economy into a recession. I'm Justin Ho for Marketplace. We just heard from Justin about how consumers respond to higher oil prices. Now we turn to Texas, where two critical industries in the state are feeling the impacts of the increased cost of fuel and fertilizer. Marketplace's Elizabeth Troval has that story.
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Chapter 3: How do high oil prices impact inflation and the economy?
I was like, I'll just do your cleaning as I'll be your hygienist. And I still could not find a job. I was like six months in and I was like, I need to make money. I'd always assumed I'd own a practice at some point. And so I went out and started looking at practice brokers and found a practice, bought it. In dental school, they don't teach you how to run a practice, how to run a business.
So trial by fire. Absolutely. The initial investment front was very, very large. And that was probably around my three-year mark where I was like, I'm, I was still in the red. I still wasn't making any money at all. And I was like, at what point do I say this isn't working? I need to go find a job where I can make some money.
There's a very, very strong idea that dentists are, you know, they're very, very wealthy, you know, oh, my crown is just paying for your next boat payment. Right. And I'm like, you haven't even touched the cost of my rent for this month.
But I was very grateful that I stuck it out so that I can treat my patients the way I feel that they should be treated without a quota from a corporate office or private equity saying I need to push this treatment. I didn't want that. I had no idea when I went into dentistry how expensive every aspect of dentistry is. We are essentially creating a very small surgical suite inside our office.
We have intraoral scanners. That's $15,000 to $35,000. We have all of our sterilization stuff. That's another $15,000, $20,000. Just the filling materials themselves are each little capsule is $5, $20, $30.
So when you look at what just the physical cost of materials is for something as simple as a filling, and then you throw in all the other overhead with it, you look back and you're like, wow, you're barely making, you know, above minimum wage if that filling takes you more than an hour.
And you end up working on extremely small margins anyway, because in multiple scenarios, the reimbursement we get from insurance has gone down and the cost of everything has gone up in 25, 30 years. But what we're getting paid has not. So when they do things like say, we're going to cut your reimbursement, it's not, oh, I can't afford my boat payment. It's I can't afford to pay my employees.
For me, my goal has never been to be the multimillionaire. I don't want to own 10 practices. I don't want to do that. I would love to just have, you know, small home, have my practice, treat patients the way that I want to. That's all I need. Catherine Sizzlo, owner and dentist at Sizzlo Family Dental in Greenwood Village, Colorado. We always say it, we can't do this series without you.
So let us know what's going on in your economy. Marketplace.org slash my economy. Coming up... The criminal can launch multiple attacks at once. AI is making scammers harder to beat. But first, let's do the numbers. The Dow Jones Industrial Average added 387 points, 0.8% to close at 46,946. The Nasdaq picked up 268 points, 1.2% to finish at 22,374.
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Chapter 4: Why is demand for oil considered inelastic?
Consumers and organizations lost $62 billion in financial fraud scams between 2023 and 2025, according to a new report from Nasdaq Verifin. The toll has grown by almost 20 percent as AI has industrialized scamming, says Verifin fraud expert Greg Williamson. So we think of the phishing attacks that have been happening for years.
Those are becoming cleaner, much more difficult to detect, but also more personalized. No more misspellings and low-quality graphics. Eric O'Neill, author of Spies, Lies, and Cybercrime, says any scammer can now run the type of sophisticated long con that used to require massive time investment and specialized skills.
The criminal can launch multiple attacks at once and has a fleet of evil AI agents doing the work for them. Agents that comb through social media to find biographical information about potential victims and create online profiles with convincing AI-generated photos and backstories. They can create fraudulent websites, chat with victims, or even appear on video.
These are sometimes called pig-butchering scams because criminals build up trust over a long period before they strike. Mikey Pruitt at security software firm DNS Filter says the contact often starts on dating apps, then moves to social media or messaging platforms. The problem is they each see a segment of the scam.
So they're catching one piece and Meta's catching another, and then Amazon is catching another. Coordination between these various services is crucial to catching these crimes before they happen, says Alice Marwick at Data & Society. Scams are a global problem. They're perpetrated by global criminal organizations and they affect people all over the world.
She says this isn't a problem a single country or even a single platform is going to be able to fix on its own. I'm Megan McCarty Carino for Marketplace. This final note on the way out today. Here in Colorado, thousands of workers walked off the job at one of the country's largest meatpacking plants owned by JBS USA. About 3,800 workers are on strike after their contract expired yesterday.
Workers are fighting for higher pay and better health care. to compensate for what they say is difficult and dangerous work. Union representatives say it's the first strike in the industry in four decades, and it comes as consumers continue to face higher beef prices that are about 15% up from a year ago.
Amir Babawi, Caitlin Esch, John Gordon, Noya Carr, and Stephanie Seek are the Marketplace editing staff. Kelly Silvera is the news director, and I'm Amy Scott. Hope to see you back here tomorrow. This is APN.
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