What's in YOUR wallet?

And I'm Adrienne Ma.

And today we are so hashtag blessed to be joined by Keith Roemer from Planet Money.

Holy moly. I don't even have an indicator T shirt. Where did you get that?

Good plug? No, I really don't have one, though. I have the tote bag but not the t shirt.

Merchpr.org this is a good question. I should really know the answer to this. Okay. Well, anyway, thank you for coming from Planet Money to Rep Team Indicator. It's great to have you, Keith.

It is that time of the week we all know and love. It is Indicators of the Week. This is our weekly look at the most illuminating numbers from the news. And today we're looking at how China

is bulking up for a financial chill,

how much we should be saving for

That's after the break. Shopnpr.org indicator okay.

It is indicators of the week. Adrian, what's your indicator?

My indicator this week is 1.4%. That is the new lower benchmark interest rate set by China's central bank. It's part of a whole bundle of economic stimulus measures that the has announced this week.

That's right. So it's already a lot lower than the US Rate. So why is China cutting interest rates now? You ask or you don't ask, but

I will tell you anyway, I'm curious.

So some analysts see this as a tactical move to bolster China's economy before it starts trade talks with the US this weekend. The US has had at least 145% tariff on imported Chinese goods. And on top of affecting US Businesses and consumers, this also hurts Chinese businesses. You know, they're taking pain because manufacturers there are having to slow down or pause shipments to the US and that's not good for China's economy. So lowering interest rates is one way China can try and counteract this with lower interest rates. That helps encourage banks to lend and consumers to spend. And the thinking is with a more robust economy, China has a little more leverage in its negotiations with the U.S.

Absolutely, Yeah.

I think it's also worth noting that President Trump really wants lower interest rates here in the US he has been blasting Jerome Powell, telling him to lower rates, and it's like Trump kind of wants.

Calling him a loser.

Yes, he's called Powell a loser, and just yesterday he called him a fool who doesn't have a clue. Now, Trump wants lower interest rates to stimulate the economy, which is similar to China's rationale, Right?

Absolutely. Yeah. And, you know, I think the metaphor that comes to mind for me of what China's doing right now, it reminds me of this. You ever see this survival competition show called Alone?

And so, you know, it's. It's where people compete to survive, to see who can stay in the wilderness the longest. And all they get to start with is, like, a tarp and some fishing line.

Exactly. Yeah. And. Or, you know, one thing a lot of contestants do before they go into the wild is they. They put on a lot of weight. And because they know they'll be roughing it, and they could go days on end with, like, very little food, the extra fat on their bodies actually helps them survive the leaner times. And in a sense, China has been preparing its people for leaner times for a while. Like, for years, President Xi Jinping has been trying to transition their economy to be less reliant on exports to the US So you could think of this stimulus package this week as part of that larger strategy.

Yeah, like a financial spare tire.

Well, speaking of financial cushions, my indicator is $35,000. That is how much an average US household should have in its emergency fund. That's according to the online reference Investopedia. It crunched the numbers for six months worth of expenses, and it came up with 35,000American dollars.

You have 17 money belts on you.

Can't be too safe, I gotta say 35 grand. I mean, is this even close to reality? Like, who has $35,000? Just, like, sitting around for a rainy day?

Yeah, your instinct is correct. This is way more than what the typical household in the US has in its savings and checkings accounts. So, according to Federal Reserve data, the median account balance was around $8,000 in 2022. If you adjust for inflation, that' around $8,700 today. So nowhere near $35,000.

Yeah, so Investopedia breaks down its methodology like this. It focuses on four big categories of household expenses. Medical care, car payments, housing and utilities, and then food. And it drew in data from sources like the US Census Bureau to calculate expenses for an average household of at least two people. The most expensive category, if you're wondering, was medical care. That account $12,000. Car payments add up to almost $11,000.

So if you don't own a car, you would only need $24,000 in your emergency fund.

Well, it gets kind of tricky, right? Because if you don't own a car, maybe that's because you live in a big city with good public transit, and that probably means your rent's going to be higher than the national average. Right. So Investopedia says six months of housing and utilities represents around $8,700. If you do the math, I mean, that's not going to last six months if you're paying rent in a city like New York or Chicago.

Oh, I have a Honda Fit.

It is 13 years old.

I mean, didn't we just go through this a few years ago? Like during the pandemic?

So you're saying tariffs are making my 13 year old Honda fit more valuable?

Isn't this a knock on effect though? The tariffs are not on used cars.

It's like if we're trying to game out what the effect of tariffs are going to be and how much inflation the tariffs will cause. It's like inflation. Is this the start of some new inflation spike that will be as scary as what we saw during the early part of COVID or is it something else? Keith, you look like you're about to pass out.

Well, I'm not selling my Honda Fit. I am trying to drive this thing until I can't drive anymore. So can't have it. No one can have it.

This episode was produced by Angel Carreras with engineering by Kwesi Lee. It was fact checked by Sierra Juarez. Katie Cannon edits the show and the indicators of production of npr.