As the rest of the world gets greener, the U.S. backpedals
Marketplace Morning Report
Marketplace
4.5 • 927 Ratings
🗓️ 28 January 2025
⏱️ 9 minutes
🧾️ Download transcript
Summary
A record 47% of the European Union’s electricity is now generated by renewable energy sources. Saudi Arabia and China have also been investing in greener energy sources. In the U.S., however, President Donald Trump has pulled the country out of the Paris Climate Agreement and is pushing more fossil fuel development. We’ll discuss. Plus, we’ll talk about the potential trajectory of interest rates and the state of the airline economy.
Transcript
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| 0:00.0 | The economy has a steering wheel. The question is what to do with it. From Marketplace, I'm |
| 0:07.7 | Subri Beneshore in for David Bruncaccio. Interest rates are basically the steering wheel of the economy, |
| 0:12.7 | and the Federal Reserve meets today to start deciding what to do with it. By all accounts, |
| 0:17.6 | the answer right now is nothing. Higher interest rates fight inflation, but lower interest rates promote growth. |
| 0:23.3 | And right now, inflation is being a little stubborn, but mostly coming down, and the economy is doing mostly fine. |
| 0:29.0 | So might as well leave things alone. |
| 0:31.7 | But with the new administration, a lot is changing and it is changing fast. |
| 0:35.7 | So what now? |
| 0:36.6 | David Kelly is chief global strategist with the JP Morgan Funds. He's here to talk about it. Good morning. Good morning. We've had so many executive orders and changes with the new administration. How long do you think it'll be before the Fed knows what those mean for the economy and starts to make decisions accordingly? |
| 0:57.2 | I think it may take a few months, but I think the really important question will actually be the |
| 1:01.8 | Tax Reform Act, whatever they call it, for 2025, which extends to 2017 tax cuts. |
| 1:07.4 | And second of all, the administration is going to use tariffs to fund some of it. But once |
| 1:11.9 | they do that, they're going to have to be specific on what the tariffs are. They can't just |
| 1:15.6 | say, we're going to put 25% tariffs on today and then change their mind the next day. They're going |
| 1:19.5 | to have to be specific. So once the Federal Reserve's got a sense of what's really going on |
| 1:23.7 | with immigration, but particularly what's going on with tariffs and what's going on with fiscal stimulus, they'll be able to judge, you know, does the economy really need any further |
| 1:31.2 | stimulus from monetary policy? If inflation is looking a little high and, you know, the immigration |
| 1:35.2 | policy and tariffs by push inflation up and the fiscal stimulus by push inflation up, |
| 1:39.1 | why should they cut rates? Last week, President Trump said he would demand that interest rates fall, and obviously |
| 1:47.0 | that's not something really presidents can do. |
| 1:49.0 | But, you know, Jerome Powell, the Fed chair, his term will end next year. |
| 1:54.0 | And I just wonder if the president did appoint someone more pliable. |
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