Understanding the diamond downturn

**SPEAKER_1** (0:00)
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**Kimberly Adams** (0:31)
We get the Fed's preferred measure of inflation this morning.
From Marketplace in Washington, I'm Kimberly Adams. Later this morning, we'll get the Personal Consumption Expenditures Price Index, or PCE, for June. Inflation has been trending higher than the Federal Reserve's 2% target, but the rate-setting body kept its powder dry this week, leaving interest rates unchanged. The Fed says the US economy will still hit the inflation target eventually. Marketplace's Nancy Marshall Gensler takes a look at why Fed officials are so confident.

**Nancy Marshall-Gensler** (1:03)
Federal Reserve Chair Kevin Warsh insisted this central bank will not waiver in its fight to get inflation back down to 2%.
At a press conference yesterday, he didn't say exactly why the Fed didn't raise interest rates at its meeting this week. That's what it normally does when inflation is too high. Instead, he stressed that businesses and consumers juggling high prices will need to be patient.

**Kevin Warsh** (1:26)
We've got no magic wand.
This isn't something that we're going to be able to carry out in days or weeks. But we're going to deliver on the responsibility that Congress gave us. And today's meeting and the preparation for today's meeting was an important step towards that destination.

**Nancy Marshall-Gensler** (1:43)
Warsh also noted that financial markets were kind of doing his work for him. Bond yields, the cost of borrowing, rose after the Fed's last meeting in June, with long-term yields jumping sharply. At this point, traders are betting that Fed officials will hike the next time they meet on interest rates in September. But Chair Warsh gave them no guarantees. I'm Nancy Marshall-Genser for Marketplace.

**Kimberly Adams** (2:07)
Nancy also did a video wrap-up of the meeting after she attended the Fed press conference yesterday. You can find that on our Instagram now. We're at Marketplace APM.
Oil prices remain volatile as the US and Iran continue to trade strikes and threats. As the war in the Middle East drags on, questions about munitions stockpiles have come up, and the Trump administration is making replenishing those supplies a top priority. Yesterday, the Pentagon committed over $120 billion for contractors to ramp up production of Patriot missiles and submarines. The deals are part of a larger shift for the Pentagon, which is moving towards striking more multi-year agreements instead of making annual purchases.

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**SPEAKER_6** (3:58)
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**Kimberly Adams** (4:32)
The legendary diamond mining company De Beers announced earlier this month that it's suspending production at South Africa's biggest diamond mine for two years and making cuts to its official prices. Paul Zymniski is a diamond industry analyst and he runs a widely followed price index for the commodity. That Zymniski Diamond Index had global rough diamond prices down 20% year over year and 40% from a decade ago.
Paul Zymniski joins me now with more on this. Good morning.