The dangers of fiscal dominance
Marketplace All-in-One
Marketplace
4.8 • 1.3K Ratings
🗓️ 24 July 2025
⏱️ 26 minutes
🧾️ Download transcript
Summary
President Trump wants lower interest rates now, but what could that mean for the economy? "Marketplace" host Kai Ryssdal speaks with Neil Irwin at Axios about the implications of Trump's push to cut rates, and why central banks should stay focused on stabilizing the economy, not helping the government manage its debt. Also on the show: One of the pieces passed in the GOP's sweeping budget bill was a measure that would end taxes on tips and overtime. We look at who qualifies and who doesn't. And later, how companies are viewing the cost and importance of business travel.
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Transcript
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| 0:00.0 | Nothing to see here, people, move along, move along. |
| 0:05.2 | From American Public Media, this is Marketplace. |
| 0:13.2 | I'm Kai Rizdahl. |
| 0:18.5 | It is 24 July, today Thursday. Good as always to have you along, everybody. |
| 0:25.2 | The president went to the Federal Reserve today. |
| 0:29.6 | That's it. That's the news. |
| 0:32.6 | The rest is all subtext of the president's well-documented desire to have either Fed Chair J. Powell gone |
| 0:39.1 | and or, he's not picky, lower, sharply lower interest rates. We here are not going to dwell |
| 0:46.4 | on the former, but the latter interest rates and where the president would have them set |
| 0:51.4 | does have actual economic import. And as we do, when we need somebody |
| 0:55.8 | to lay it out for us in plain English, we've called Neil Irwin. He's the chief economics correspondent |
| 1:00.2 | at Axios. Neil, it's good to have you back on the program. Thanks for having me, Kai. |
| 1:04.2 | Let's do some building blocks here. First of all, what is monetary policy for? |
| 1:10.0 | Well, the idea is you adjust the supply of money in the economy in ways that try and maintain a stable footing, to try and stabilize the ups and downs of the economy. |
| 1:18.4 | What you want is when there's a recession, you want cheaper money so that people will spend more. |
| 1:22.3 | When there's inflation, you want tighter money, less money out there so that inflation comes back down. |
| 1:27.6 | And it is, of course, that very famous dual mandate. The Fed has, right, which is price stability and maximum employment. Now, President Trump really, really, really wants lower interest rates. He wants lower interest rates down to 1% on the federal funds rate because he says it will save the country |
| 1:45.7 | trillions of dollars. Make that make sense in terms of monetary policy. |
| 1:51.5 | So what that suggests is shifting to a different set of priorities for the Federal Reserve |
| 1:55.9 | and for monetary policy, making these decisions on interest rates not based on what's happening |
| 2:00.2 | to the job market, not based on what's happening with inflation, not based on what's happening to the job market, |
| 2:01.1 | not based on what's happening with inflation, but based on what's convenient for the federal |
... |
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