A view of AI, from Mumbai

Hey, so we've got six and a half minutes to fill up at the top of the program. What do you want to talk about? From American Public Media, this is MarketPlex. In Los Angeles, I'm Kyle Rizdahl. It is Friday today. This one is October the 16th. Good as it always is to have you along, everybody. So much to talk about, so little time. So here we go. Courtney Brown is at Axios. Catherine Rempel is at MS Now. Hey, you two. Hey, Kyle. Hey, Kyle. So let's see. Courtney Brown, you get to go first. Inflation this week, 3.7% for consumers. The producer price index, I said this yesterday, it is a whopping 6.3% year on year. What's happening? That's hot. That's hot inflation. Yeah, when I opened that PPI release, I was like, whoa. And I think a lot of people were like, whoa, as well. So it seems like the Fed here, if we didn't know before, has an inflation problem, right? That is why they raised rates in September. What was interesting to me is it looks like this is no longer just a Iran war energy problem. The service sector, what we call super core, service sector inflation. And other parts of the economy are also pretty hot. So the big question is, how does the Fed respond to this? Well, we're going to get to Chairman Warsh and his little adventure over in the Pacific. I guess it was last night, East Coast time. Catherine, I do want to talk to you, though, about real wages having fallen six months in a row. If Republicans were not already worried about how this election was going to go, you know, real wages are a key indicator of what the electorate is going to be doing come Election Day. Yes, American consumers have basically hated this economy for years at this point, maybe in ways that were a little bit disconnected from the fundamentals. But I kind of understand now why consumers might feel yucky, right? Their wage growth is being outpaced by the increase in costs for some of the reasons that you all just talked about related to the war and to energy. But lots of other things. Are getting more expensive, too. You know, home insurance isn't just as an example of a category that has gotten a lot more expensive. So it's not just about things that have energy as an input across the board, more or less. Consumers are dealing with higher costs and their paychecks are not keeping up. If you look at their savings rates as a result, they have been trending down just because they're having to dip into savings, essentially, to pay for. Their daily costs. And, yeah, they hate it. They do, indeed. Courtney Brown, you brought it up, so I will continue on that thread. The Federal Reserve, Chairman Warsh was over in, I guess, Bangkok doing a Q&A thing with the IMF. Not surprisingly at all, he didn't say anything. But it was surprising that given the data we've gotten, he didn't say anything. Yeah. And, you know, we live in such a weird world right now. On so many levels. On so many levels. But specific to the Fed, he has committed, we know this, to not doing the forward guidance thing. But still, when he says nothing, financial markets interpret that as something. So his silence was interpreted as, OK, October, they probably won't raise rates. And so that, the fun thing is that even though Kevin Warsh has stopped giving forward guidance, his colleagues have not stopped giving forward, not stopped. So we've heard from New York Fed President John Williams, we've heard from the Fed Vice Chair, and they both signaled that rates were probably not going up in October. So that's where we are. A little bit of non-forward guidance and a little bit of forward guidance. Put that together, you get a clue about what happens in October. I don't know. Well, look, so let's keep going, Catherine, on a clue about what happens in October. What do you think happens at the October Fed meeting, given what we know now? Well, I can just go based on what markets think. And I know you say that, we've said that, Courtney said that Kevin Warsh said nothing. You agreed Kevin Warsh said nothing. But markets did move, at least like if you look at where their betting rates are going to go. I looked it up, and yesterday they thought that there was a rate hike chance of about 27 percent, and now it's down to 17 percent. So in both cases, you know, expectations that the Fed is. It's going to stand pat. But it does look like they're going to have to act at some point in the next few months, even if it's not this month, because of all the things we've been talking about, about prices going up, about diesel getting more expensive. The International Energy Agency said that just said that global diesel prices are going to rise even higher and we're going to have shortages through the middle of next year. So all of that suggests that even if they stand pat this month, that doesn't mean we've we've sort of rotated. Out of this, what may be a hiking cycle. Courtney, did I hear you nodding there? He says in a radio term. Yes, I mean, I think so. We almost explicitly New York Fed President John Williams said that there probably will be another rate hike this year, likely in December. But he also said maybe that's it, which just against the backdrop of the data we got this week. It seems hard to believe that they won't have to raise rates again. But what do I know? Who knows? Who knows? It's literally your job. You know, bunches. That's the thing. This is the weird place we are in. Right. It is literally my job. And it's so hard for me and a bunch of other people on Wall Street who get paid way more than I do to forecast these things. You know, they don't know either. No, fair enough. So, Catherine, look, in the last like 40 something seconds we have. Let me ask you to riff on this. Right. Courtney is very Marcus focused, very detail oriented. You think it a higher sort of plane, right? You're more strategic. Talk to me for a second. About where this economy is on a on a very high level, because as we've talked about, the fundamentals are good, but people are cranky. I wouldn't sell Courtney so short. I think she's a pretty strategic thinker, too. OK, fair enough. I didn't mean to. That's the way it came across, Courtney. I apologize. Catherine, thank you. Anytime. I will defend your honor. But what I would say that where the economy is, is that we have had inflation above target for overseas. Over six years now. So in many ways, that suggests the economy is running hot. There are other indicators, however, that suggest that as resilient, I guess, as the economy has been, it may have some fragility to it. You've had a slowdown in hiring. There's a lot of dependence on the AI sector to sort of prop up the entire economy at this point. Investors are maybe getting a little bit skittish about how soon that's going to pay off. So so where's the economy? You know, it's really hard to say other than we have a lot of problems. But so far, those those problems have not tipped us into recession. And the hope is that they don't. They don't. Fair enough. Catherine Pell at the Bulwark. Courtney Brown at Axios, to whom I apologize. No, no slight intended at all. What? Never, Kai. Never. We'll see you guys later. Thanks for coming on. Thanks, Kai. Bye, Kai. Wall Street today. Hey, are you worried about AI? Too much borrowing? Maybe not enough? You know, profit? Stock traders, same. Details, numbers, when we get there. This next story brought to you by anhydrous ammonia, urea, and diamonium phosphate, all of which the market research firm DTN says are as much as 20% more expensive this year than last. Not probably interesting to the layperson. But if you are a farmer in this economy who right about now is trying to decide when to buy fertilizer, of which the aforementioned three are key components. Well, is it better to bite the bullet now or wait till spring when prices? I mean, who knows? Marketplaces. Caitlin Tan takes it from there. No matter when farmers buy fertilizer, Iowa Farmers Union President Aaron Lehman says it's kind of a lose-lose. I don't think that there's any winners in this. Because prices are high and likely going to stay high. Fertilizer spiked after the Iran war. And there's really no end in sight. There are no low fertilizer prices in sight at all. Lehman is buying now. He says others are hedging their bets, waiting till spring. It's really a mixed bag. As an economist who is paid to have a crystal ball, I have no idea what to tell you. Trey Malone is with Purdue. He says U.S. agriculture and its input costs are part of a massive global market, which he likes to think of as a ball of yarn. Those strings move in a lot of wild ways. And we've never seen the yarn ball be pulled this uniquely. From erratic trade deals to tariffs and wars, including Russia's invasion of Ukraine. which also spiked fertilizer prices in 2022. So this is not unprecedented. Jackie Faka with CoBank says the key difference is back then, farmers were getting more for their crops. They could pay right out of their earnings to be able to buy those inputs. Now crop prices are lower. That means farmers are using less cash and more loans for purchases, whether they're buying fertilizer now or in the spring. I'm Caitlin Tan for Marketplace. We've been talking prices so far, prices that consumers and farmers are having to pay. The next logical step, it seems, is someone who is setting prices. Philip Rollins sells records and comics, new and used, at his store. It's called Offbeat. He's in Jackson, Mississippi. Business is pretty good. We have got a ton of inventory in, so we're trying to organize a lot of inventory. But it's been interesting. We've acquired a few collections in the past couple of weeks. One, I had to drive like two hours from where I'm at to get over 1,200 records. But it hasn't gotten to the point of people selling because of, I would say, hardships. I have a few people that I'm selling to fix a car or pay for down payment for rent or something, but nothing that's like, I'm selling because I need to pay my water bill type things just yet. Costs overall have kind of balanced out. What's interesting right now is gas is just high. I drive like a Ford Escape. Putting 50 bucks in it is crazy to me right now. So next few weeks, this is what I call my hell quarter, basically. The next three months is just like, okay, giving up for the holidays and trying to not overwork myself. It's like, all right, I need to do everything right now to get it on the floor is the biggest challenge currently. Philip Rollins running offbeat in Jackson, Mississippi. Coming up. The kind of talent that would go study at a Stanford and then work at a Google, Microsoft. The future of the Indian workforce. But first, let's do the numbers. Dow Industrials off 175 today, three-tenths percent, 52,002. The NASDAQ tanked 572 points, 2.1 percent, 26,140. S&P 584 points to the downside, 1.1 percent, 7659. For the week, the Dow eked out six-tenths of one percent. NASDAQ had its worst week since April 2025, lost four and a half percent. S&P 500 lost about two percent. We have talked about CoreWeave three days in a row now. Wednesday, shares went kablooey. Yesterday, it recovered about a third of what it lost. Today, back in the losing column for the AI company that provides what kids these days call compute. Shares of the debt-laden company plunged nearly 12 percent. Ouch. You're listening to Marketplace. This is Marketplace. I'm Kai Risdahl. Today, the last stories from Mumbai for our series, The Age of Work. How demographic changes around the world are reshaping the global economy. This building is impressive by any city's standards. It's huge. That's Neela Richardson, the chief economist at ADP. The building is indeed huge. It's a 10-ish story glass building, huge atrium. There's a koi pond, shiny metal escalators. And a bunch of tech companies listed on the directory. Oh, yeah, we're in a high-tech startup. We are in a high-tech startup. I mean, they've got a little cafe. They've got fruit, cappuccino machine. This is Cure AI. There's an open-concept floor plan, desks and monitors all over the place. That poor person over there on Slack. God, it's a curse, I'm telling you. There are hanging plants and signs here and there that read, A decade and day one. The company has been around since 2016. We came, obviously, to talk to the CEO, but we beat him here. You guys want to sit? Please, you can. Trashant will take, like, five, ten minutes. We waited over near a cluster of desks where a handful of people were working away. I should say here that we had seen a huge sign near the doors we came in that said Cure AI was one of the best startups in Mumbai in 2025. Cure AI. So seriously, good place to work? So what do you guys do? Regulatory and quality affairs. Getting clearances and certificates. All right. And you, sir? What do you do? Operations for life sciences. As you can tell from the name, maybe, this is an AI company for healthcare, specifically using artificial intelligence to diagnose diseases early. Think lung cancer or TB. Okay, now you, because you looked at me. Account management for life sciences. That's Anjana Ramesh. She is 25 years old. She's been working at Cure for a bit more than a year. So how did you get your job here? Yeah. Seriously, how did you get your job? Oh, I cold messaged Trashant on LinkedIn and I was able to. Really? That's a gutsy move going straight to the CEO. Yeah. And what did you do before that? School, probably? I was a management consultant. Oh, were you? Yes. How was that life? Hectic, busy. Yeah. Yeah. How long are you going to be here, do you think? Here's a better question. Yeah. What's a better job than this to have in Mumbai? Not many. I think being at startups in Mumbai is the best thing that you can do right now. It makes sense. This is the prime age workforce and the allure of working at a startup is kind of universal. Over across the office, the CEO of Prashant Warrior, the guy Anjana messaged once upon a time, came in from another meeting. We started chatting with him even before he had a chance to put his backpack down. Great to meet you. I'm Neela. I'm Kai. Nice to see you. How are you? Nice to meet you. So the only thing you have to do is hold the microphone up just like this. Okay, perfect. Let's get in the central area so we have a little more room. Shall I remove the bag here? It's up to you. It's up to you. Prashant got his education in the United States. His Ph.D. is from Georgia Tech, but he started his company here in Mumbai. QRAI is in more than a dozen U.S. health systems now. It's got about 600 employees around the world, from the U.K. to Africa to Southeast Asia. And of those 600, the majority, are here in India. What's the competitive advantage for you of being in Mumbai? Because the U.S. is a huge part of your market, right? I mean, you've got big health care systems over there, all that. U.S. is a big customer, big customer base. But the advantage that we had here was that we had access to a lot of data, which is still, I mean, the number of people that go into any hospital in India is probably multitudes larger than any other system in other parts of the world. And so we had access to a lot of data to train the algorithms, and then we had access to really good computers. So the kind of talent that would go study at a Stanford and then work at a Google, Microsoft. And who then came back here to work for you? They actually stayed here. They didn't go to those places. That's a big change. Think about Akhil, who we heard from on Monday, or Jay from Fashion Panda. It used to be that Indian students would go to the United States for their education and either use those skills at U.S. companies, or bring their skills back to their own country. Now, though, the entire upskilling ecosystem is right here. What do you think of the current narrative in the U.S. around AI and how some of these frontier companies have captured it in terms of jobs and mission? Let's be explicit, right? Because the narrative around AI in the States is AI bad and terrifying, right? Yeah. The fact is that. Everywhere else outside of healthcare, AI is about taking away people's jobs because it is doing things that people can't do. But I think in healthcare, it can do things that people can't do, and it can actually improve outcomes. So I think healthcare is one of those places where it is creating a better world and increasing the GDP of the world. India has a really tech-savvy young population. They use, according to ADP data, they use AI, all of them in their jobs, at some really, really high rate. The highest in the world. There you go. And it's viewed more friendly here than it is in a lot of parts of the global economy. And I guess I wonder, do you see that as a competitive advantage for this country? It'll always be. It'll always be. People have always been tech-savvy. This is from the days of Y2K, where those problems were solved here, even in the web era, right? And India created that talent. Even for AI, I think we will have more AI-enabled engineers, AI-enabled all kinds of workforce in India than the rest of the world. India will always be at the forefront of that because. India has always been at the forefront of that for the last 25 years, last 30 years as well, yeah. India's future might look like a place like Cure AI, but its present looks like this. BKC, kind of an upscale business district. It's under construction, just like everything else. And we, of course, have hit the end of the workday, so there's bumper to bumper to bumper traffic. Any direction you want to go? Yeah, we're going. Construction. for an investor. Russian cars, all kinds of commerce and industry. It is everything, everywhere, all at once. All right, Neil Richardson, here we are. We are now, first of all, in a very large and loud traffic intersection. But also, we are in 21st century Mumbai, right? There's corporate office towers. There is Bank of America. There's Bank of India. And I guess my question is, after what we've done, what hits you the most? And then we'll go from there. I think, well, we've experienced a lot in the last three days. And I've seen so many views of what the future could look like. Could's doing a lot of work right there. Yeah, because I'm not quite certain about any particular direction gaining steam. But the one that hits me hardest is the one I first saw, which is the view from my hotel room. I'm on a corner unit, and there's a perfect view, gorgeous view of the Arabian Sea. It's like. India is reaching out to the rest of the world. And on the side view is an abandoned slum-type building where people are living on the rooftop. And the curtain was firmly closed on that view. But the thing is, both views are right. And without the structure, the infrastructure, the youth and promise of tomorrow cannot expand around the globe. It is like we talked about yesterday. It's inner. It's messy because there's no. When we were in Vietnam, we both, I think, came away from Vietnam seeing a trajectory. Yes. And even though this economy is growing at 7-plus percent a year. That's right. Even though it's young and dynamic and a tech-savvy workforce, I don't. That trajectory is not at all. I don't understand how they get from here to there. So this is where I fall on being an economist. Eventually, it comes in handy. You are the trained economist in this conversation. There is an economic truism. There's only one way an economy grows, and that's if there are more workers, and those workers become more productive. Now, India has the more workers part on lock. Right. It's the productive part, right? With all those challenges we were talking about a second ago. That's right. That's right. Production first means you have to have jobs. And there has to be job creation behind the growth. And second, you have to have skilling, reskilling, redeployment to those jobs. You have to have both. You have to have more workers and more productivity. And that's the missing connection here. I don't want to end this story in Mumbai on a downer, but what happens if they don't get it right? Well, I don't want to end on a downer, too, because I have faith that the economy always wins and the economy demands infrastructure to grow. But what happens if they get it wrong doesn't. I don't want to end on a downer, but what happens if they get it wrong doesn't. This final note on the way out today, we've been talking all week about core versus headline inflation, the standard rationale for the core number, which takes out food and energy prices because they bounce around a lot. The rationale is that that core, the underlying number, gives you, by which I mean the Federal Reserve, a better sense of which way the inflation trend is going. Now, that is extremely not useful for us regular people who regularly have to buy both food and energy. So it is with some degree of regret that I have to tell you that oil prices shot up 3.5% today. The U.S. benchmark is back above $100 a barrel. The global standard, Brent North Sea, almost $110. Our theme music was composed by B.J. Liederman. Marketplace's executive producer is Nancy Fargalli. Joanne Griffith is the chief content officer. Neil Scarbrose, vice president and general manager. Our series this week, The Age of Work, was produced by Andy Corbin and Sarah Leeson. Charlton Thorpe did all the audio engineering. Nancy Fargalli both runs the show, and she ran that project. I'm Kyle Rizdahl. Have yourselves a great weekend, everybody. We will see you back here on Monday, all right? This is APM.