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A price is finally falling for American families.
And I have no higher priority than making America affordable again.
We have made progress this year in non-tariff related inflation.
Welcome to World Business Report from the BBC World Service.
I'm Sam Fenwick.
The Federal Reserve has cut rates again, so we're going to be in Pennsylvania, where the cost of living is causing real concern.
Was President Trump's visit to the state yesterday enough to allay those fears?
And from pasta to truffles, Italy's food culture has now been given a unique UN status.
How might it boost Italy's global food brand and its authentic local producers?
So if you're a US homeowner or you're running a business or you're just doing your weekly grocery shop, things might soon start to feel a little bit easier on your budget.
The US Federal Reserve has cut interest rates by a quarter of a percentage point to three and a half to three point seven five percent.
And that's the lowest level in three years.
Here's the Fed chair, Jerome Powell.
Today, the Federal Open Market Committee decided to lower our policy interest rate by a quarter percentage point.
As a separate matter, we also decided to initiate purchases of shorter-term Treasury securities solely for the purpose of maintaining an ample supply of reserves over time, thus supporting effective control of our policy rate.
To look at how this rate cut might affect ordinary Americans.
We're going to head now to Pennsylvania, where President Donald Trump was yesterday addressing a crowd about the cost of living crisis.
And I have no higher priority than making America affordable again.
That's what we're going to do.
And again, they cause the high prices and we're bringing them down.
It's a simple message.
Mr. Trump went on to say that prices had started to fall over the past 12 months.
So rent prices are down, dairy prices are coming down very strongly.
The cost of Thanksgiving turkeys was down by 33% compared to the Biden era.
Biden era, you know what you did during the Biden era for Thanksgiving?
You said, oh my God, this is terrible.
A Thanksgiving meal with all of the trimmings is 25 less under Trump than it was a year ago under biden.
That's, that's a good start.
We're bringing it down and we're coming down more.
We're coming down a lot more.
Let's talk now to michael godlewski.
He runs eyv restaurant in pittsburgh.
So how do you feel, michael?
Do you feel, as mr trump was saying there, that prices are coming down?
Does it feel like you've got more money in your pocket?
Unfortunately, we don't.
Our costs from the start of the year compared to last are up just around 6%.
We don't see that alleviating.
Everything's kind of been up and down with, you know, the tariffs coming on and off and just general consumer sentiment, you know fluctuating so much based on their own economic proceedings.
So as of right now, our costs have not come down.
They've kind of leveled off a little bit.
Things are fluctuating, you know, certain items and certain items.
But overall, they're up.
Mr. Trump was there saying that he wants to make America affordable again.
How do you define what affordable could be for the people that are coming into your restaurant?
I think that's a very broad brush, because everyone has their own personal priorities and things.
Whether it's kids, you don't really know what anyone's paying off.
Maybe they have a relative they're taking care of that is sick and they don't have health insurance.
So, I mean, there's a lot of variables.
I think we would define it more as people that feel like they have, one, disposable income.
And two, that they feel economically that they're safe to go ahead and spend that income and not have to store it away, either to pay down excessive debt that they racked up from pricings on credit cards, or a rainy day fund that they feel they need to store away from if things turn south economically.
You've been running your business for three years or so now.
How does it feel over that three years?
How does it feel now compared to when you started?
Um, it's usually like a roller coaster.
You know, it goes high and it goes low and you try not to, you know, ride those waves too high.
But this year has felt a little more challenging than the first two, just based with, you know, the uncertainty when tariffs came in, you know, in the start of April that was the slowest couple of weeks we've ever had in business and things have slowly ticked up.
But now it's a little more, you know. consumer sentiment dropping a little bit.
We've seen some drop-offs through November and the start of December, which should normally be a very busy month for most restaurant businesses.
I mean overall in the year.
Right now, revenue-wise we're down just around 6, less than we did the year before.
So it's been a challenging year trying to come up with ways to manage price hikes and also labor shortages.
So it's been a lot more challenging year to have to get a little more creative to try to deal with things, that's for sure.
OK, well, thank you so much for that insight there, Michael Godlewski there from EYV Restaurant.
He was joining us today from Pittsburgh.
This is the third straight meeting where policymakers have opted for a cut, but the move has exposed some rare divisions inside the central bank, with three members dissenting, one calling for a larger half a point reduction and two arguing for no cut at all.
Let's get the thoughts now of Susan Schmidt.
She's portfolio manager at Exchange Capital Resources in Chicago.
And Claudia Schwarm is the chief economist at New Century Advisors and a former Federal Reserve economist.
Claudia, first of all, how long is it going to take for these rate cuts to get through to people like Michael?
When will he start feeling the reduction in rates?
Right.
Well, it does take time.
But we should remember the Federal Reserve started reducing their policy rate in September.
So this is the third of the cuts that we've seen so far.
But it does tend to.
It's more like weeks, not days, that this ends up in terms of lower borrowing costs, maybe getting more of the customers coming in.
And it's not probably going to be dramatic.
It's going to help and it'll take some time, but it's not.
You know, things don't turn on a dime when the fed cuts rates.
And i i heard uh, jerome powell at his press conference.
He was also talking about the impact of tariffs and how we might not actually see the impact of those higher prices until well into next year.
Right,
Well, you know, inflation overall in the United States has basically moved sideways this year, closer to 3 percent than 2 percent, which is what the Fed targets.
But the tariffs appear to have been pushing up the goods price inflation.
But we're probably not entirely done with that.
It still looks like businesses are holding on to some of those costs that they're paying on imported goods.
So it may still be that we've got more inflation coming at American consumers.
But there has been a good news story with inflation in that a lot of the services inflation particularly related to housing.
We've seen some real improvement this year.
So on net, not much improvement, but under the hood, there are some signs.
Susan, tell us how investors are reading this third rate cut.
And often they're looking at what was said after the rate cut, what we should be pricing in for the next few months.
That's right.
Investors are always looking forward.
Investors anticipated that there would be a rate cut after today's meeting that would be announced.
It was it came in at that quarter percent reduction, which is what investors anticipated.
So investors took that very favorably.
Interest rates impact smaller companies the most.
So we saw the biggest move in the Russell 2000, that small company index, reflecting that with the Russell 2000 closing up on the day.
And then, of course, the SP and the Nasdaq and Dow all responded positively as well, because investors got what they anticipated.
And how does that dissent within the central bank members who are voting?
Three were dissenting one calling for a half a point reduction.
Two saying that there shouldn't be a cut at all.
How will that affect the markets moving forward from here?
Investors are going to keep a close watch on this.
Normally, although three doesn't sound like a big number, three dissents is actually quite large in terms of the Fed body.
So we thought about that as we go forward, and investors really have to take that in stock.
These comments after the meetings become the most important thing to take note of.
In Chairman Powell's comments today and in the dot plot which indicates what those board members anticipate to be future movements in interest rates.
That showed only one cut further in interest rates in 26 and another cut in 2027.
Investors will be watching that closely to see if that's enough to help stimulate the economy or if that raises concerns about ongoing inflation.
And Claudia, how are they balancing the sort of weak labor market which we've been hearing about with the risk of the inflation from tariffs which you mentioned a moment ago?
Right.
And that's been the reason that we're seeing disagreement across Fed officials.
They all recognize that inflation is still too high and they all recognize that the labor market is softening.
It's just a question of which is the bigger risk, which one does the Fed need to react to?
And The balance.
The majority came around to the idea that the labor market, the downside risk, the potential for things to really unravel with unemployment rate moving higher, that that was what they needed to respond to.
But honestly, with every cut they do, it's going to be harder to do the next one, as long as inflation stays elevated.
It really is still a problem.
Now, Claudia, I want to ask you something before you go about the role of the Fed chair.
Jerome Powell, who we heard from earlier, is leaving the position and the president, Donald Trump, is currently hunting for a replacement.
How significant is that choice?
What qualities will the White House be looking for in the next Fed chair?
And what does that person actually do day to day?
Right.
So the Fed chair is the leader of the Federal Reserve System.
At the end of the day, when you go to vote on the policy rates, that individual is just one of 12 votes, right.
So, you know, the Fed chair has a vote.
They're very important in leadership.
But if they have a viewpoint, say that interest rates should be lower, they have to be able to build a consensus across the committee and then have that see-through.
So need to be a good communicator, need to be a good consensus builder.
And at the end of the day, the Fed really is driven by the data.
And so I think that's you know.
We're going to see a transition next year with a new Fed chair, as we would see every time.
But there's extra concern and scrutiny about exactly who's coming in that position.
And are they going to be as driven by the data as Jay Powell and his predecessors have been?
But even if maybe that person isn't driven by the data, the board members, who have all voted today on this rate cut, will be driven by the data and they vote on it.
So can a president or anyone else have that much influence on a panel of people?
There are limits on it, the way the institution is set up.
And it has been a very long time, but the Fed chair has been in the minority on a vote in the past.
Right.
So if they don't have seven people that are willing to say yes, we should cut rates, the rates are not going to be cut.
So it is you know.
But again, the Fed chair is extremely important as a leadership position in the institution.
But it's not a given that you put someone in place that wants to cut rates, that we're going to have rates cut.
Right.
And how quickly do you think or how cautiously will they tend to be when they get in that new role?
I suppose it depends on the person, does it?
Yeah, it's absolutely going to depend on the person.
And I do think of the candidates that are being discussed.
They all are ones that have the capacity to come in and be a Fed chair, like we are familiar with.
Follow the data, build a consensus, think independently.
So it's really a matter of... how that person comes into the role.
And then there are a lot of other discussions at the Fed, bigger changes that could happen next year that could really change the dynamics.
But I think we could have something business as usual.
OK, well, thank you so much for explaining that to us.
Claudia Schwarm there, chief economist at New Century Advisors and also a former Federal Reserve economist.
Susan Schmidt is going to stay with us.
We're going to talk to her again in a little moment.
Want to know how to become the richest person in the world?
Start with the latest episode of our podcast, Good Bad Billionaire.
We're telling the story of how Elon Musk amassed half a trillion dollars from his troubled childhood in South Africa to buying Twitter and launching rockets into space, with all the boardroom dramas along the way.
Find out how he did it on Good Bad Billionaire.
Listen wherever you get your BBC podcasts.
You are listening to World Business Report from the BBC World Service with me, Sam Fenwick.
Now, the price of silver has hit a record high.
An ounce of silver crossed the 60 US dollar mark on the spot market, where the precious metal is bought and sold for immediate delivery, for the first time yesterday.
Ollie Hansen is a commodities trader from Saxo Bank in Denmark.
Silver has been living a double life because on one hand, it's an industrial metal, but also it's an investment metal.
The higher gold prices early this year helped trigger some demand for not only silver but also platinum, because they were relatively cheap compared to gold.
Since then, it has just continued.
We are seeing a world where there's a lot of uncertainty out there.
There's worries about debt.
We see this de-globalization we're in the process of.
We got inflation, which is likely to remain at a sticky high level.
And that's attracting investment demand into silver.
But then we have the whole industrial side of things as well.
Silver is part of the new technologies.
It's anything from electrical vehicles to solar panels to AI to data centers.
And, if I may add, from the industrial perspective, it's important to note that the silver content of the total production is relatively small.
So that means the price of silver is inelastic, meaning that running out of silver is simply not an option.
Around 58% of total silver demand is industrial demand.
That gets taken out of the market not to return unless there is some recycling at a later stage.
But the 58% is all physical.
And if there is concerns that we in the next six to 12 months could see some problems on the supply side, then they will rather buy today and not having to worry about that at a later stage.
Recently, as well, we saw a very, very strong demand from Indian consumers.
And that's on the jewelry side as a substitution to very expensive gold prices at the time.
So that helped tighten up the market, leaving the London market extremely tight in the physical market.
London is the main center for physical trading of silver.
And that market was almost down to its last bar.
So it had to scramble to seek supplies elsewhere.
That has started to sort itself out.
But the London market, in terms of cash supply, In terms of physical bars, it's still very tight.
That was Olly Hansen.
He's a commodities trader from Saxo Bank, and he was talking to us from Denmark.
Susan Schmidt is still with us, portfolio manager at Exchange Capital Resources.
You're in Chicago for us today.
We were just talking about the Fed's rate cut.
Do you think that that could be feeding into this move for higher metal prices like silver?
Well, certainly the overall investment market is feeding into, I think, a larger and greater demand for alternative assets like gold and silver.
Investors are looking at their portfolios in the stock market, recognizing that they've had really quite strong performance, particularly driven by AI.
But we have seen some shadows of risk around AI and that AI investment theme.
Investors with that consciousness about the risk have moved into and looked for other places to invest.
Precious metals have been one of those places.
We saw that in gold initially and silver as a double effect, because it's also an industrial product that needs it to be completed.
The tech industry really has to have that silver to provide all of this.
So not only is it benefiting investors by potentially feeding into an industrial boom in technology, but also by that precious metal alternative asset.
And what about kind of?
I don't know the end user of these electronics or solar panels that are using silver?
Will they see their costs go up and will those costs be passed on?
It's such a small percentage of many of the end products that, as we said, it has to be bought to manufacture.
It will be purchased to manufacture these goods regardless because it's necessary.
The overall cost of the silver within that final product is quite small.
It's largely going to be invisible to the consumer in terms of a price difference at this rate.
But having said that, the price of silver is up over 100% year to date.
If this continues, we will see that price increase start to flow through.
Well, that was my next question.
Is it a short term spike?
I mean, over 12 months, maybe not that short term, but do you see it as kind of continuing?
That's a really tough one to answer, and that goes for gold platinum again, all the precious metals.
We don't know right now.
A lot of the precious metal investment and the interest in that sector has come from people who are trying to diversify away from the equity markets and their stocks as they get concerned about valuations and equity markets potentially around that AI so-called bubble.
It's hard to know how that sentiment will play out going forward.
It's going to be an interesting 2026, that AI bubble conversation, isn't it?
Let's talk about oil prices now, because they've risen over the last few hours after the US announced that it seized a tanker off the coast of Venezuela.
Let's hear now from President Trump.
He was speaking to reporters at the White House.
As you probably know, we've just seized a tanker on the coast of Venezuela, a large tanker, very large, largest one ever seized, actually.
Susan, how significant is Venezuelan crude oil in the global supply of crude oil?
So this makes for a great headline in the oil industry.
But in terms of actual percentage exposure in the world's daily supply, Venezuelan oil is only 1%.
So it makes for a big headline.
But the reality of it is the oil market will be able to adjust around this.
We've seen after the announcement some immediate impact in the prices of oil, but it's only been up half a percent and it's still at relatively low levels per barrel on a price basis.
So we're not too worried about it right now.
And isn't Venezuelan oil quite specific in the way that it's refined and the places where it is refined?
It is, but oil markets tend to move on overall sentiment and emotion.
And that's what President Trump's big announcement is appealing to trying to have more of a shock impact.
We did just have a meeting by OPEC two weeks ago, increasing supply of oil on the market.
And their oil also taken around the world.
Oil is a global currency in some ways will be able to offset any decline here from that.
1 supplied by Venezuela.
Yeah.
Well, we are going all around the world now because we're going to head to South Korea now because their biggest online retailer, Coupang the boss of the biggest online retailer, Coupang has resigned, taking responsibility for what was one of the country's biggest ever data breaches.
Park Dae-jung is the highest profile casualty of a crisis which sparked a massive public backlash and a government investigation.
BBC Korean journalist David Oh has been following the story.
This case of Coupang, because of the sheer amount of impersonal information, is now reaching nearly 34 million customer accounts.
Initially, the case was first reported in November.
It was known that only 45,000 personal accounts have been hacked.
It found out that almost 34 million customer users' accounts have been exposed by the data leaking, including the personal information, phone numbers and home addresses.
So this is a serious case.
Investigation is still ongoing.
The South Korean parliament is questioning the Groupang CEO and every person about why this happened.
Susan, when a company as large as this suffers a major data breach, what are the kind of financial and reputational risks that they face?
Reputational risk on this can be huge, particularly depending on the company's business.
How much of the customer's private information perhaps financial data is released or at risk because of the breach.
It can have quite a big implication, and we have seen the remediation of this causing extra expenses for the companies that have suffered from this, having to then backstop and offer cybersecurity services, credit profile checks, et cetera, to the customers that were impacted.
This is a growing problem among big corporations and even small corporations.
And one of the reasons cybersecurity is becoming such a focal point.
Now, I've got a question for you now.
What do you like at cooking Italian food?
What don't I like?
Now, it might be a simple pasta or something a little bit more ambitious.
And if you are anything like me maybe not so much like Susan the results aren't going to be something that Italians would approve of.
And even King Charles has joked about the British ruining Italian food.
And we have benefited hugely from your influence over what we wear, what we drink, and what we eat.
I can only hope you will forgive us for occasionally corrupting your wonderful cuisine.
We do so, I promise you, with the greatest possible affection.
That was King Charles there, addressing the Italian parliament back in April this year.
And now Italian cuisine has been given special heritage status by the UN.
Well, to tell us about this, Andrew Cotter is here.
He's the editor-in-chief of Appetito magazine.
Andrew, thanks for being with us.
First of all, explain what this UN status means, this UNESCO listing.
Well, thanks for having me, Sam.
It's a really big deal.
This is the first time UNESCO has recognized a cultural heritage as being part of humanity.
This is not a site that they're designating around the world, which they normally do.
It's the recognition of something cultural, with regards to heritage and humanity, which is immensely important.
And it's Italian cuisine, you know.
And it's not a single dish or a recipe, but their entire embrace throughout the history of food as integral part of their culture.
Italian food, even King Charles knows, right?
Italian food is the best in the history of the world.
So he does.
I wonder what sort of Italian food King Charles actually cooks for himself.
So it's sort of an important recognition of the culture that food has or the part that food plays in Italian culture, rather than sort of protecting Parmesan cheese or something like that.
Well, yes.
I mean, protecting Parmesan cheese is actually part of it.
But as I've mentioned, Italian food is the best in history of the world.
I mean and they emphasize strictly right and with great passion and throughout their history you know emphasis on quality ingredients sourced locally, simply prepared, hopefully shared with others slowly if you're eating around the table and being present while you enjoy it.
And that's humanity.
I mean, this has been part of their traditions all along.
But lots of countries have food which is part of their culture.
So why has Italy been picked for this particular status?
Why wouldn't you have Japanese food, for example?
Well, I think Italians do this better than anyone else, right?
And they do so with the knowledge that food is what informs and connects the other aspects of what we cherish in life.
Family, friendship, community, heritage, history.
I'd also add self-love and identity.
I mean, you are what you eat, and Italian food is the best food in the world, so it makes us more human.
Do you expect this UNESCO listing to strengthen the international profile of Italian cuisine and help producers financially to produce authentic Italian ingredients?
Absolutely.
I mean, this is a big boost for them.
I'm sure they're thrilled.
We've worked very closely at Appetito magazine with the Italian trade agency, who's been the major force behind this all along on promoting authentic products, helping to educate consumers what made in Italy means and why they should care and why they should look for the designations on the packaging.
There's little red labels and blue labels for PGO and PDI, PGI, excuse me.
It's easier to just look for the label than know what PDO stands for.
But it's indicating that these products have been regulated and looked over very carefully and curated by the Italians.
And they take great pride in promoting that.
Andrew, just very quickly, because we're coming to the end of the show.
Do you think I'm still allowed to knock up my rather questionable bowl of pasta at home, or will UNESCO be sending someone around to check up on me?
I think you should be safe at home.
But I'd encourage you to carefully choose the ingredients.
I will.
And maybe get a recipe book.
Thank you so much, Andrew Cotter, for joining us today on World Business Report.
Thank you also to Susan Schmidt.
Want to know how to become the richest person in the world?
Start with the latest episode of our podcast, Good Bad Billionaire.
We're telling the story of how Elon Musk amassed half a trillion dollars from his troubled childhood in South Africa to buying Twitter and launching rockets into space, with all the boardroom dramas along the way.
Find out how he did it on Good Bad Billionaire.
Listen wherever you get your BBC podcasts.
