Congratulations, Chairman Warsh. I guess from American public media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl. It is Friday today. This one is the 24th of April. Good as always to have you along, everybody. We have seven minutes at the top of the program today to talk about the week gone by. And I got to tell you, I am not sure it is going to be enough. Catherine Rampell is at MSNOW, also at the Bulwark. David Gora is at Bloomberg. Hey, you two. Hey, Kai. Catherine, you get to go first. The news of the day, of course, in our wheelhouse, as it were, is that the U.S. Attorney for the District of Columbia, Janine Pirro, is dropping, and you can't see me, but that's in air quotes, the investigation into the Fed and Chair Powell. I guess I wonder, first of all, what you make of that. Well, it seems like the White House is White House slash DOJ. I know that they're supposed to be independent from each other, but it seems like all of the above have recognized that they are getting in their own way or Trump is getting in his own way, that the way to get his pick for the next Fed chair, Kevin Warsh, through is to find an off ramp for what certainly appears to be a politically motivated criminal investigation into Jerome Powell, and that the way to get Kevin Warsh cleared is to abide by Senator Tom Tillis's request to drop this investigation, because Tillis says he likes Warsh, but he's not going to move forward any of Trump's picks for the fed until this investigation is done. And to my knowledge, we still have not heard from Tillis to know whether this satisfies that demand, because it's not totally clear that Powell is out of the woods. Right, right, right. So, David, let's keep going with that. The last line of Pirro's tweet this morning, because that's how we do government policy nowadays, is by tweet or true social. Her last line was, I reserve the right to reopen this investigation. And I guess, you know, to Catherine's point, is that enough for Tillis, who we think is looking for an off ramp? But also, what about Powell? Right. Because let's remember his term is up as chair on the 15th of May, but he does have the statutory right to stay on the board for another two years. years. It's a great point. So we haven't heard from Senator Tillis. We haven't heard from Jay Powell. And remember what he said a little while back. He said he was going to stick around until this probe was resolved with transparency and finality. Those were his words. And so I think the question is, does this mark a resolution of that? So in that tweet that you referenced in that post, Janine Pirro passing the buck over to the inspector general of the Federal Reserve, calling upon the inspector general to do this investigation of the renovations and what Powell said to Congress. I should note, back in July, Fed Chair Jerome Powell called for the same thing. So this work has been underway by the inspector general already. But I think that's really the key question here. If this is simply moving from one investigator to the next, is that going to satisfy the Fed chair that this investigation is over with? And I, like Catherine, like you, waiting to see what we hear from the senator who's been threatening to block all of this and from the chair. And we'll see if anything emerges here over the course of the weekend. Catherine, with complete awareness of what happens when one assumes. Let's assume that this all works out, as it were, for the way the president wants it to. And Mr. Warsh does get the actual job. What did you make of his confirmation hearing this week? To be honest, I found the whole thing a little bit frustrating because the elephant in the room is this criminal investigation of Powell, which may or may not be dropped. Right. And to the extent that that came up, the question for Warsh was, would you, you know, well, do you agree with Powell that this was politically motivated because of a disagreement over policy? He was also asked about whether he would stand up and defend Lisa Cook, who is a board member whom Donald Trump has been trying to fire. That case is before the Supreme court and Warsh punted on both. And nobody asked Warsh, well, what would you do if in fact you had a disagreement with the president and he wanted you to cut interest rates and you slash the FOMC did not cooperate? What would you do if he threatened you, smeared you, launched a criminal investigation into you, tried to fire you? And nobody asked that. And so I found that a little bit frustrating because I think that that's really what matters more than anything else, even if Kevin Warsh has indicated that he would cut interest rates or at least try to encourage the rest of the FOMC to cut interest rates. He can't do it solo. It's going to become increasingly difficult for the Fed to do that because inflation has been so stubborn. And so that question will arise should there be a chair, Kevin Warsh. Right. So, David, let's keep going with that. You had a great conversation with Michael McKee, who covers the Fed from Bloomberg earlier this week. And what I want is an understanding of walking in the door now. What is worse going to be like as a Fed chair? Because this has been a tricky process. It's been a tricky process. And he's somebody who has opined for a very long time about what he would like to see the Fed become, how it should operate, how much it should communicate, how much it shouldn't, how it should approach inflation. I think that's another element of frustration, to borrow Catherine's word here, is that he was very unwilling to engage with what he has spent his whole career talking about during the course of that hearing. And he had a very cute way, and I say that respectfully, of dealing with this. He said, I'm not a believer in forward guidance. So he used that as a way to kind of shut down any questions that were hypothetical in nature. As we've talked about before on the show, his job is going to be to rally this committee behind him or to try to do so. It's not just his decision alone. Emphasizing that, again, for everybody who doesn't have an intimate knowledge of how the Fed works. I think that is going to be a huge challenge for him going forward. You know, whether he wants to cut rates or the president's telling him to cut rates, he has to work with this committee to convince them that that would be the thing to do, even if, in fact, it is not the right thing to do at that particular time. Catherine, they meet next week. The Fed does. And just to bring it to current events, right, we're still in the middle of an energy shock. The mantra at the Fed has been we're going to try to look through this energy shock to see what's going on. But we also had the International Energy Agency this week saying you know what this energy crisis is going to last two years How then does one run a central bank when you trying to do that They're in a very difficult position. They were in a difficult position before, obviously, given that inflation had been hotter than they wanted and the economy seemed to be slowing down is maybe the right way to describe it. You know, not in a bad space, but yeah, unemployment was creeping up, et cetera. So they already had this very difficult set of constraints around them. And now there is this question of, is this a one-time shock or does this feed into trend inflation? And if you listen to some of the things that Fed officials have said recently, they have suggested that they are very worried about this feeding into trend inflation. So not something that they would, quote unquote, look through. I think it was Christopher Waller who said recently that he was worried that kind of the one-two punch of tariffs plus the energy shock slash everything shock could potentially create conditions similar to those experienced in the aftermath of the pandemic. I certainly hope we're not in that circumstance. But, you know, there's there's good reason to worry about that. If you look at inflation expectations that came out today in the, you know, University of Michigan. Yes, exactly. So so there is reason to worry that that this is not just about energy. This is not just about a one time shock that this could this could potentially cause expectations to become unanchored, which is exactly what the Fed does not want. David, real quick, like 15 seconds. How do you read the tea leaves for the meeting this week? They hold, right? They hold. But I mean, I think everything they had planned is out the window. I expect a robust debate will take place there. But yeah, I think we don't see any kind of movement. David Gurra, Bloomberg, Catherine Pell, MS Now, The Bulwark as well. Thanks, you two. Thanks, guys. Wall Street to end the week that was war or what? Me worry? We'll have the details when we do the numbers. I think we mentioned Meta and Microsoft yesterday, almost 25,000 positions between the two of them that are either going away or aren't going to be filled so that those two companies can spend more on artificial intelligence? A lot of that spending is building physical AI infrastructure, all those data centers, computer racks and GPUs, the hardware of it. But it turns out that actually using AI is turning out to be a bigger and bigger expense for a whole lot of companies. KPMG figures companies are going to nearly double their AI usage spend in the next year to the point where it might start to rival employee salaries in some cases. Marketplace's Megan McCarty Carino has that one. At a fireside chat at the Federal Reserve last year, OpenAI CEO Sam Altman mused about the future of AI economics. It does in fact look like we're about to deliver on intelligence too cheap to meter. But for now, it's definitely metered and it's not all that cheap. The way it's metered is with tokens. The way that I like to think about it is sort of like the number of turns your interaction with the AI sort of takes. Max Kahn is a tokenomics analyst at SemiAnalysis. He says a basic conversation with a chatbot takes a handful of turns. You ask the AI some questions, it gives you an answer, maybe you ask like two or three more follow-ups, and that's about it. But new AI agents might analyze hundreds of documents, talk to other agents, and keep doing these things around the clock. It is easily like 100x, 1,000x, like maybe even 10,000x more tokens. And some companies like Meta are reportedly token maxing, says Daniel Newman at Futurum Group. Employees, they're basically being encouraged to consume as many AI tokens as possible. The idea is there's this direct correlation between token consumption and productivity. A recent Goldman Sachs survey of large companies found many are overrunning their AI budgets by orders of magnitude, and AI spending could equal engineers' salaries in the near future. This doesn't really make economical sense. Ed Zitron is a tech critic who hosts the podcast Better Offline. I don't think a lot of businesses are actually aware of how much this really costs. He says tech companies had been subsidizing AI. Now, they're increasing prices. And most businesses aren't really measuring return on their investments, says Brian Jabarian, an economist at the University of Chicago. How do you prove with hard-coded data that AI has been fruitful for your business? The bigger the AI bill, the bigger the benefits needed to justify it. I'm Megan McCarty Carino for Marketplace. We were talking yesterday about the government's tariff refund website having opened up this past week. Businesses mostly. We're going to get back their share of the $166 billion that the Trump administration collected illegally. Today, another occupant of those trade and tariff trenches, Gretchen Blau. She's our customs brokerage manager at Logistics Plus in Erie, Pennsylvania. I've been spending my week working in the Cape Portal. The Cape Portal is where you apply for the IEPA refunds. So my week's been spent a lot with importers making sure that they're registered for those electronic refunds. Our smaller customers were a little bit daunted by the process. So rather than do a basic help desk for them, we decided to just do it on their behalf. There are 11,600-some entry numbers. The files I'm uploading, I just use the analogy of they're like the old school Christmas lights. If one bulbs out, they're all out. The entire file fails. So if there's a problem with one line number, you have to find that particular line number and see what the problem is and then go from there. IT says I might be killing my computer The sound stopped working the I have two additional monitors and they started strobing like they were at a rave because the computer's overheating. Our IT guy looked at me and said, yeah, you might need a new laptop after this is over. I'm hoping to see that everything is appearing in Ace as promised. That's the automated commercial environment for customs and border protection, where our importers, our customers can run reports and see the status of their refunds. And I'm hoping that people start getting money in their bank account and start getting happy again for that. Gretchen Blau, she's IT's favorite customer, I'm sure, Logistics Plus in Erie, PA. Coming up. We slept maybe two to four hours a night for a whole straight month. Running a women's sports bar is definitely not all fun and games. But first, let's do the numbers. Dow Industrial is off 79 points today, two-tenths of 1%, 49,230. The Nasdaq grabbed 398 points, 1.6%, finished at 24,836. The S&P 500 rose 56 points, 8.10%, 71.65. Some renewed AI optimism is what's going on with the Nasdaq. For the week, though, the Dow dipped four-tenths of 1%. The Nasdaq added 1.5%. The S&P 500 increased to 0.6%. Bonds up, yields down. 10 years at 4.30%. You're listening to Marketplace. If you're a business leader, Intuit QuickBooks Payroll is an essential tool that completely integrates payroll, time tracking, HR, and your financials in a powerful all-in-one command center. No more juggling platforms or switching between vendors. All your data synced into one platform, offering clarity and confidence to make smarter decisions and focus on what matters. This summer, QuickBooks Payroll evolves to support the entire team lifecycle. HR, time, benefits, and payroll all working together in one connected system that fully integrates with your books. You'll be able to onboard employees in one seamless flow that feeds directly into payroll, configure automated HR workflows for things like promotions or offboarding, and track performance, time off, and benefits alongside payroll. Upgrade your workflow with QuickBooks Payroll today and get ready for the brand new tools coming soon. More at quickbooks.com slash workforce. That's quickbooks.com slash workforce. This is Marketplace. I'm Kai Rizdahl. Try to count for me now, would you? How many Procter & Gamble products you have in your house? Not even specific brand names, but just categories. Somewhat off the top of my head here, it's like five or six in my house easy. So you will not be surprised to hear that the OG consumer products company reported better than expected earnings this morning. Net sales up 7% year on year. And the thing is, that wasn't just because of higher prices. P&G says there was an increase in volume to the straight up amount of stuff that we bought. Marketplace's Carla Javier has more on what that might tell us about already squeezed consumers and their appetite for spending. Consumers and investors see the maker of Pampers, Bounty, Charmin, Tampax, Dawn, and so much more as a litmus test, says Robert Moscoe at TD Cowan. If Procter's doing well, the consumer must be doing well, too. The company's 2 percent growth in volume, Moscoe says, is encouraging. Take Tide laundry detergent as an example. It's purported to be eight times more effective than the prior formulation. And the message has resonated with consumers. They're buying more of it. He says that's because the higher performance improves the value equation for potential customers. Innovation matters too, says Erin Lash at Morningstar. It's about things that make a consumer's life easier or enhance it in some way. Whether that's a smaller pack size, a larger pack size, something that's easier to open, a more favorable scent. Lash says that's why the Tidemaker says it's still upping its investments in research and development and marketing, despite cost headwinds. If you are a consumer that is really pinching pennies right now, you want to make sure that your clothes are getting clean each and every wash cycle and that they're not, you know, becoming tarnished. Because a new wardrobe is expensive. That all said, Katie Thomas at the Kearney Consumer Institute points out that budgets are really tight these days, pressured by rising prices of food, gas. So product quality will only get companies so far. There may be some loyalty there, but we've also seen brands discounting, so consumers may be chasing the discount and not being as loyal as perhaps we think they are. Which is why she says companies, including Frito-Lay, are rolling back prices. And retailers, including Walmart, Amazon, and Target, are leaning into their own loyalty programs and promotions. because, she says, consumers will still spend if they feel like the prices they're paying are fair. I'm Carla Javier from Marketplace. Hey. Hello. Nice to see you. How are you? Stephanie. Good to see you, Stephanie. How are you? Hi, I'm Janie. How are you? Doing great. Tell me where we are. We're at Untamed Spirits. Untamed Spirits is the first women's sports bar in the city of Los Angeles. Stephanie Ellingwood and Janie Trin started it back in June of last year. There's a big inside bar, tons of TVs, of course, and a great back patio with string lights and hanging plants. Also, of course, more flat screens. We were there one morning about three or so weeks ago, a couple of days after the Women's March Madness final. Well I super excited to be here because number one women sports is cool New bars are always good Let go out in the courtyard for like two seconds and I want to ask you about something So here this sign It says, Untamed Spirits, grateful you came. Can't wait to see you again. LA's first home for women's sports. Correct. Awesome idea. How did you come to decide that you guys were going to be the ones to do it? We actually weren't the first. There was a few others before us, and we're LA City's first home for women's sports. There's other ones around too. There's just this movement in women's sports, and I don't think it's a fad. I think this is a moment in history where things are going to grow. And before, a few years ago, when we go out to sports bars, because we are huge sports fans, we cannot find women's sports on the TV. And on top of all of that, we couldn't even find audio for women's sports. So we thought, you know what, if there is a potential, So if there is a market for this, we're going to do it. We're going to create a home for women's sports. How heavy was the lift? We both lost 15 to 20 pounds each. No, really? Within a month? Oh, yeah. All right, this is radio, so people can't tell, but you guys, I don't know how you can afford to lose 15 to 20 pounds. Oh, yeah, it was insane. We slept maybe two to four hours a night for a whole straight month. And we kept working for half a year nonstop before we finally were able to take a day off of work here and there. You kept this place open, right? This used to be a different bar, and you kept it open while you were doing the changes. Correct. Yes, yes. And how did you bootstrap yourselves? I mean, you've got a side hustle or two, right? You do other stuff? We saved up from our previous businesses, which is from real estate development. And we thought, you know what? It's now or never. We've got to go big or go home and pray, and we don't go home. So this is now our home. Yeah, we also had some friends and family who were super supportive of us and trying to help us in any way that they can. I mean, they came up here Sunday morning at 9 a.m. to help trim all the plants. And we should say there are a lot of plants. Sunday, you guys must have been packed for the women's final. Absolutely. It was spectacular. That's when we should have come, actually. It would have been too loud to record. Oh, that's true. Well, good, right? Although the game was kind of a blowout, right? I mean, honestly. Yeah. I'm glad UCLA won, whatever. Game was at 1230, noon. Everyone was out having a blast in the patio. It was hot. People were inside, outside. We couldn't have asked for anything better than that. Other than the big days, right? Which, you know, you got the women's Final Four. You've got Angel City, right? You guys are affiliated with them. Absolutely. The Sparks. Other than the biggies, how's like day-to-day business, right? Because that's what you live and die of. Yeah. Yeah, definitely that's something that we focus on a lot because we always make sure that during the week we have other types of events. We have trivia every Thursday. That's usually pretty busy. People love it. We have Taco Tuesdays, $3 tacos, $3 tequila shots. $10 margaritas. What could possibly go wrong? But one thing that I think we've also curated is a lot of people like to spend their anniversaries here, birthdays here. They'll bring their group of 15, 20 people. They can all get together, have an inexpensive meal, and just have a good time and watch sports at the same time. It occurs to me this bar could not have existed like 8, 10 years ago. Probably not, honestly. Absolutely not. The hardest part about that is women's sports weren't playing on TVs. You couldn't actually find it unless you were on YouTube or trying to find it from someplace else. like it wasn't accessible now in the last like five years you can turn on espn and actually see you know women's sports which that was not definitely not happening 10 years ago yep are you uh are you profitable yet can you guys pay yourselves not quite but we'll get there we'll get there we'll get there we're almost almost a year yeah yeah yeah Our one-year anniversary is coming up real soon, so we can't wait for that. Oh, yes, absolutely. We throw it down. Yeah, no kidding. No kidding. So in five years, where are you with this place, with an expansion? What do you think? This is funny. Stephanie just asked me this question the other day, and we had a crazy day at the bar. So I said, please, don't ask me this question. Just answer it. So go. I'll let you answer it. There you go. Sorry. our goal that I'm going to convince her to do as well. Our goal is to have five locations in five years. You grow too fast. It's really dangerous. You know that. I totally get that. But we also want to be the firsts everywhere. Thanks, you guys. I appreciate it. Thank you. Thank you. This final note on the way out today, we're going to go out on petroleum since the straight is still closed. Negotiations are, I think, set for this weekend and the unknown unknowns do keep piling up. Brent North Sea, the global benchmark, back over $100 a barrel, 106.42 to be precise. Gas says AAA, 405 a gallon. That's within a couple of cents, actually, either way of where it was both yesterday and a week ago. Our theme music was composed by B.J. Liederman. Marketplace's executive producer is Nancy Farghali. Joanne Griffith is the chief content officer. Neil Scarborough is the vice president and general manager. And I'm Kai Rizdahl. Have yourselves a great weekend, everybody. We will see you back here on Monday, all right? This is APM. As the Trump administration ramps up its crackdown on immigration, more people are making the difficult decision to leave the United States. I'm Rima Gres, and this week on my podcast, This Is Uncomfortable, we're asking, what does it really cost to leave the U.S. when you're undocumented? And what can life look like on the other side? I have to look around and remind myself that this is not a movie. This is my life. I am able to cross borders that I had never allowed myself to dream of. Be sure to listen to This Is Uncomfortable wherever you get your podcasts.
