Where interest rates go from here

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Kimberly Adams (0:31)

Awaiting the Fed's decision on interest rates and a legal fight over music fundamentals.

From Marketplace in Washington, I'm Kimberly Adams. In about seven hours, we'll get the US. Central Bank's decision on interest rates. Markets are betting right now that the Federal Reserve will hike rates, maybe one-quarter of a percentage point. Marketplace's Nancy Marshall Genzer has more.

Nancy Marshall Gensler (0:54)

After the Central Bank's last meeting on interest rates in July, Federal Reserve Chair Kevin Warsh was accused of not clearly explaining the Central Bank's decision to hold rates steady. Claudia Somm is a former Fed economist who's now Chief Economist at New Century Advisors. She'll be looking for some specific words and phrases today, especially anything that could shed light on what will happen later this year.

Claudia Somm (1:17)

If the Fed talks about taking out insurance or trying to manage some of the risks, when it takes that approach, it tends to be more modest increases in interest rates.

Nancy Marshall Gensler (1:29)

Like, say, a half percentage point in total over several months versus an extended rate hiking cycle like during the pandemic and its aftermath. Somm says Warsh doesn't need to be so specific. He boxes the Fed in and limits its choices in the future. But she would like an explanation of the thinking behind today's decision. I'm Nancy Marshall Gensler for Marketplace.

Kimberly Adams (2:08)

Do you recognize these songs?

In reverse order, that was Gasolina by Daddy Yankee, Hello by Karol G, and Titi Me Pregunto by Bad Bunny. All names that are huge in reggaeton music, and all in the middle of a copyright lawsuit over that core, syncopated beat you hear, which defines reggaeton. But there was a big setback in Federal Court earlier this month for the groups who filed the lawsuit. For more on that, let's turn to Jennifer Jenkins, a professor at the Duke University School of Law. She's also author of the book, Music, Copyright, Creativity and Culture. Professor, welcome.

Jennifer Jenkins (3:02)

Thank you so much for having me.

Kimberly Adams (3:03)

Can you briefly lay out who filed this lawsuit and what exactly they're suing over?

Jennifer Jenkins (3:09)

Sure. The lawsuit was filed by a Jamaican production duo named Steely and Clevey.

Way back in 1989, they had created an instrumental track called Fish Market. In 2021, they filed this sprawling, massive lawsuit against over 160 defendants, targeting over 1,800 songs. By the way, I'm not making those numbers up. And the claim is that all of these songs are infringing that core dembo rhythm that you hear in their instrumental track, Fish Market.

Kimberly Adams (3:51)

Here's the isolated beat that's at the root of all of this. It's what's called the dembo rhythm. And here's where that rhythm shows up in that song you referenced, Fish Market, from 1989

But Professor Jenkins, can you own a copyright for something like this?

Jennifer Jenkins (4:18)

The answer is a resounding no.

Copyright actually has two doctrines that are unusually good fits for this particular case. One, it's French. It's called sens affaire, which is French for scenes that must be done. That says no one can own an element that defines a genre. Copyright also says you can't own something unless it's original. Well, the rhythm you heard is not only in thousands of songs after Fish Market, it was in thousands of songs before Fish Market. Anything copied from other songs isn't copyrightable.

Kimberly Adams (4:54)

What did the judge in the case say about that?

Jennifer Jenkins (4:57)

So he basically said in July of this year that his hands were tied. And the case had to go to trial. And so we were all settled in for the long haul, waiting for a trial, maybe all like in late 2028 At the last minute, Bad Bunny's brilliant lawyer filed a motion for reconsideration. These are almost never granted. And he basically went back to square one to own a copyright. You first need a copyrighted work. And what the plaintiffs had done is stitched together with a lawyer called a Frankenstein rhythm from three different tracks for purposes of this lawsuit.

And so he made that argument to the judge and the judge said, you're right, there is no single copyrighted work containing the rhythm they claim to own.