Planet Money

Indicators of the Year, Past and Future

December 31, 2025

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  • The episode features a 'Family Feud' style competition where Planet Money and The Indicator staff argue for their chosen economic indicator of 2025: Consumer Sentiment (Kenny Malone), Tariffs (Greg Rosowski), or the CAPE Ratio (Darian Woods). 
  • The discussion on 2026 indicators highlights potential future economic flashpoints, including the Federal Reserve's interest rate policy amid political pressure, rising electricity rates driven by AI data center demand, and the resilience of consumer spending being concentrated in the top 10% of earners. 
  • The episode underscores the theme of a K-shaped economy, where high-income earners benefit from asset appreciation (stocks, housing) while others face financial strain, as evidenced by high consumer sentiment but poor sentiment readings, and strong overall spending masking high debt delinquencies. 

Segments

NPR Pledge Drive Interruption
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(00:00:00)
  • Key Takeaway: NPR and its associated podcasts, including Planet Money, are soliciting listener support via Planet Money+ subscriptions at plus.npr.org due to a tough year for public radio.
  • Summary: The episode opens with a message noting that 2025 was a difficult year for NPR and local stations, urging listeners to support public radio. Subscribing to Planet Money+ unlocks perks like bonus episodes and sponsor-free content. The call to action directs listeners to plus.npr.org.
Indicator of the Year Competition Setup
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(00:00:57)
  • Key Takeaway: The core segment of the Planet Money and The Indicator crossover event is a ‘family feud’ where three colleagues present their case for the defining economic indicator of 2025.
  • Summary: Host Waylon Wong introduces the ‘Indicators of the Year’ competition, pitting Darian Woods, Kenny Malone, and Greg Rosowski against each other. Each participant gets 60 seconds or less to argue why their chosen indicator defined the economic year. Listeners are tasked with voting for the winner on The Indicator podcast.
Consumer Sentiment Argument
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(00:02:54)
  • Key Takeaway: Kenny Malone argues that consumer sentiment, which has been in the 50s in 2025 (historic lows compared to pre-pandemic levels around 100), is the indicator of the year because public feeling about the economy dictates behavior.
  • Summary: Kenny Malone champions consumer sentiment, noting it has been low for three straight years, indicating widespread public distress regarding prices, inflation, jobs, and housing. He humorously struggles to find his correct script, referencing past wins by colleagues on the same topic.
Tariffs Argument
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(00:04:43)
  • Key Takeaway: Greg Rosowski argues that tariffs are the story of 2025, citing the average effective tariff rate jumping from 2.5% in 2024 to 16.8% in 2025, the highest since 1935, creating a paradigm shift.
  • Summary: Greg Rosowski focuses on the dramatic imposition of tariffs, including a controversial move against a territory populated largely by penguins, leading to market volatility and legal challenges like a Costco lawsuit. The high tariff rate represents a major shift in U.S. trade policy, with the Supreme Court expected to rule on its constitutionality.
CAPE Ratio Argument
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(00:07:10)
  • Key Takeaway: Darian Woods argues for the CAPE ratio (cyclically adjusted price to earnings ratio), noting it is at its highest level ever, second only to the period just before the dot-com crash, signaling extreme stock market expensiveness.
  • Summary: Darian Woods, dressed as Dracula, presents the CAPE ratio as a measure of stock valuation relative to earnings, suggesting stocks are overvalued and likely to underperform. This high ratio reflects the AI boom, fears of a bubble, and the widening K-shaped economy where the wealthy benefit disproportionately.
2026 Indicator Predictions Introduction
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(00:09:54)
  • Key Takeaway: Following the 2025 indicator debate, the show transitions to predictions for the most telling economic indicator of 2026, featuring Waylon Wong, Steven Passaha, and Cooper Katz McKim.
  • Summary: The first part concludes with instructions for listeners to vote on the 2025 winner on The Indicator podcast. The second half of the episode focuses on looking ahead to 2026, bringing in new panelists to present their forward-looking economic indicators.
Federal Funds Rate Prediction
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(00:10:55)
  • Key Takeaway: Steven Passaha predicts the Federal Funds Rate will be the key 2026 indicator, driven by the end of Jerome Powell’s term in May and intense political pressure from President Trump for lower rates, potentially leading to a Trump loyalist chair.
  • Summary: The current Fed Funds Rate is 3.5% to 3.75%, following three rate cuts in late 2025, but internal Fed divisions are apparent. Fed independence is threatened, as the President has publicly stated he will only appoint a chair who agrees with his stance on lower rates, complicating the Fed’s already difficult job of parsing mixed economic data.
Electricity Rates Prediction
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(00:13:06)
  • Key Takeaway: Steven Passaha predicts electricity rates will be a major indicator in 2026, as costs have jumped 7% (compared to under 3% general inflation) due to massive power demands from AI data centers and aging infrastructure.
  • Summary: Electricity rates have been climbing much faster than overall inflation, with projections suggesting home heating costs could jump by 12% this winter. This demand surge is directly linked to the energy needs of AI data centers, compounded by the need to replace aging power grid infrastructure and repair lines damaged by natural disasters.
Consumer Spending Prediction
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(00:15:08)
  • Key Takeaway: Cooper Katz McKim predicts consumer spending will be the 2026 indicator, noting that current resilience is masking underlying weakness, as the top 10% of earners (making $200k+) account for nearly half of all spending.
  • Summary: Despite poor consumer sentiment, overall spending remains resilient because high-income earners benefit from asset appreciation (stocks, home values) and Trump’s tax cuts. However, lower-income consumers show stress via record-high auto loan delinquencies and credit card debt, meaning overall spending hinges heavily on the stock market remaining strong.
Episode Wrap-up and Credits
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(00:17:14)
  • Key Takeaway: Listeners are encouraged to email feedback or suggestions for future indicators, and the winner of the 2025 Family Feud will be announced on The Indicator on Friday, January 2nd.
  • Summary: The hosts thank listeners for their support throughout 2025, especially those who shared episodes or subscribed to Planet Money+. Production credits are listed for both Planet Money and The Indicator teams, concluding the episode.