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Morning news brief

ROB SCHMITZ, HOST:

There is no doubt 2024 will be a consequential year in politics. There's going to be a presidential election with starkly different visions for the country on how to handle everything from the economy to immigration and abortion rights. And criminal trials are looming for one of those potential candidates. Here to walk us through the biggest political questions of 2024 is NPR senior political editor and correspondent Domenico Montanaro. Hey, Domenico.

DOMENICO MONTANARO, BYLINE: Hey, Rob.

SCHMITZ: So let's start with the Republican primary. What will you be looking for as the nominating contests start?

MONTANARO: Well, I mean, the big question for me in this primary is whether Nikki Haley or Ron DeSantis can actually give former President Trump a real run for this nomination. I mean, to this point, Trump has led by huge margins in the polls. And so much of what we've been talking about in this race is really the race for second place. Voting is just weeks away here, with Iowa kicking off January 15. Let's see what voters think. You know, I'm always excited when we can transition away from talking about the polls to talking about actual results.

SCHMITZ: So we are in this weird situation where the front-runner for the Republican Party's nomination is facing dozens of criminal charges. The charges have not hurt Trump with Republicans. Do you expect anything to change in a general election if he gets there?

MONTANARO: Yeah, I mean, so far, those trials have only helped Trump with Republican base voters. He's been able to say he's been persecuted. And his base certainly believes that. But that's not likely going to be the case with persuadable general election voters who have pretty negative views of Trump. We could have a situation where Trump is on trial during a general election. Georgia, for example, has proposed a start date of August 5 with cameras in the courtroom. You know, and I don't see how an O.J.-style trial helps Trump in a general election. But this is someone who has always believed it's better to be in the spotlight than not to be.

SCHMITZ: That's right. You know, even with the questions about Trump's legal challenges, there certainly is not an easy path for President Biden here, is there? I mean, what's he contending with?

MONTANARO: Yeah, I mean, you have the wars in Ukraine and Israel, the latter of which has really led to a fracturing of the Democratic base. There are major immigration pressures and, of course, negative perceptions of the economy. Despite some strong signs in the economy, people continue to be pretty pessimistic about it. You know, a major question for me is whether those perceptions improve. Does the Federal Reserve loosen its belt some and lower interest rates? Does inflation continue to ease? Those are going to really be key.

SCHMITZ: So are these things - like, you know, the economy and, you know, the wars - are they going to be what determines this election?

MONTANARO: Well, they're going to be big factors, obviously. But maybe the biggest question for me that will determine the presidential election is which matters more - frustrations with how Biden is doing his job and with his age or the negative views of Trump. Most voters say Biden is too old to be president, and they give him low approval ratings. But in many surveys, they like Trump even less. You know, and I'd expect Democrats to spend millions of dollars reminding voters what it is they don't like about Trump. And expect them to use abortion rights again as a motivator to get voters to the polls.

SCHMITZ: So we've also seen several third-party candidates jump into this race. How do you think they'll affect this?

MONTANARO: Yeah, I think they're going to be a huge wild card, I mean, something that keeps Democratic strategists who I talk to up at night. You know, you have people like Robert F. Kennedy Jr., Jill Stein, Cornel West. No one is quite sure how any of them will factor in. But Trump has a pretty firm base of supporters. So if you start there, Democrats worry that disaffected voters who would have chosen Biden over Trump would vote potentially for one of those others and open up a path for Trump back to the White House. Those candidates and whether they gain real support could be something key to watch here.

SCHMITZ: That's NPR's Domenico Montanaro. Domenico, thank you.

MONTANARO: You're welcome.

(SOUNDBITE OF MUSIC)

SCHMITZ: The U.S. economy did better than expected in 2023. So what's ahead in the new year? Will the economy continue to bubble like freshly popped champagne? Or will we suffer a hangover from stubborn inflation and high interest rates? We're only a few hours into the new year, but NPR's Scott Horsley has been talking with forecasters about what they see on the horizon. And he joins us now. Hey, Scott.

SCOTT HORSLEY, BYLINE: Hi. Good to be with you.

SCHMITZ: So, Scott, what is the outlook for this year?

HORSLEY: Well, Rob, we should start with the caveat that most of the predictions made a year ago at this time turned out to be wrong. So take this with a grain of salt.

SCHMITZ: OK.

HORSLEY: In general, though, economic forecasters expect some relative calm in the next 12 months. The economy is expected to grow a little bit more slowly. Unemployment is expected to tick up a little bit from its very low level but not much. And both inflation and interest rates are expected to moderate this coming year. The Federal Reserve has signaled that it's probably done raising interest rates and will likely start cutting rates in 2024.

SCHMITZ: The prospect of lower rates has already given a lift to the stock market. What does it mean for the rest of the economy?

HORSLEY: It would certainly help sensitive sectors like manufacturing, which was in a slump for most of last year. Factory managers were already looking for a rebound in 2024. And Tim Fiore, who does a monthly survey of factory managers for the Institute for Supply Management, says lower borrowing costs would likely make that rebound stronger.

TIM FIORE: It looks like the worst of the manufacturing difficulties are likely behind us or soon to be behind us. The first half of 2024 will be better than the second half of 2023.

SCHMITZ: Wow. So factories are feeling pretty bullish about 2024. What about the housing market?

HORSLEY: You know, housing is another sector that really struggled last year with rising interest rates. A lot of would-be buyers were priced out of the market. And a lot of would-be sellers who had locked in cheaper mortgages felt like they couldn't afford to move. But we have started to see some relief in mortgage rates. You know, they dropped from nearly 8% in October to just over 6.5% last week. And the National Association of Realtors think rates will come down a little bit more this spring. They're probably not going back to the ultra low 3% range we saw 2 or 3 years ago. But Ryan McLaughlin, who heads an association of realtors in Northern Virginia, thinks we will start to see a pickup in home sales this year.

RYAN MCLAUGHLIN: The initial sort of sticker shock of the quick rise in interest rates over the past year or so caused home buyers to sort of pause and say, wait, you know, this is too much, but consumers are starting to get more comfortable with where the rates are going to be. At some point, life happens, and people are going to move.

HORSLEY: The shortage of homes for sale has also given a lift to home builders, who are keeping busy. And that's been good because we need to build a lot more housing in this country.

SCHMITZ: So, Scott, I hate to say this, given how the predictions for 2023 were all wrong, but is it safe to say that we've dodged a recession?

HORSLEY: Well, it's safe to say we didn't have a recession in 2023.

(LAUGHTER)

HORSLEY: It's harder to say that with confidence about 2024. But, you know, a growing number of forecasters do think the Fed may succeed in getting inflation under control without sending the economy into a ditch. The stock market is acting like we've already achieved that so-called soft landing. Joe Davis, who's global chief economist at Vanguard, is not so sure. He thinks the fallout from last year's high interest rates is still making its way through the economy and that 2024 could still be a bumpy ride.

JOE DAVIS: Markets have surprised me - how strong they are. If you're a long-term investor, it's brace for some volatility. I think the market's naive.

HORSLEY: You know, stocks are priced for a very rosy 2024. But there are always potential pitfalls out there. The job market could turn out to be weaker than we expect. Consumer spending could take a hit. Obviously, there's no shortage of geopolitical uncertainty right now.

SCHMITZ: Right.

HORSLEY: So economic forecasts are kind of like New Year's resolutions. Probably best not to put too much faith in them.

SCHMITZ: That's NPR's Scott Horsley. Thanks, Scott.

HORSLEY: You're welcome.

(SOUNDBITE OF MUSIC)

SCHMITZ: All sorts of companies and researchers have embraced artificial intelligence. And that includes people working on climate solutions. Julia Simon from NPR's Climate Desk is with us to explain how AI is being used to tackle global warming. So, Julia, climate change means more wildfires. And I understand some companies and researchers think AI can help with that.

JULIA SIMON, BYLINE: Yeah. I spoke with Carsten Brinkschulte. His company, Dryad, is based in Berlin, where you're based, Rob.

SCHMITZ: Yes.

SIMON: He's working on what he calls an electronic nose for fires.

SCHMITZ: OK, electronic nose. That sounds interesting. Tell me more.

SIMON: So one thing to help stop mega fires is detecting them early - right? - when it's in the early smoldering stage. So Brinkschulte is installing these electronic noses, basically sensors, in the forest.

CARSTEN BRINKSCHULTE: And like a nose, we can actually smell fires. We can smell the organic material burning.

SIMON: So the sensors pick up on the gases of the fire. And this is where AI comes in. Brinkschulte's company trains AI in the sensor to distinguish between normal smells in a forest and the smell of a forest on fire. He says using smell to detect fires can be better than, say, using satellite imagery because by the time a satellite can spot a fire, it can be too late. And detecting fires early means it's a lot easier to fight the fire.

SCHMITZ: So how do they know if these electronic noses are working?

SIMON: Yeah, it's early days. They have 50 sensor installations around the world fleeing. Brinkschulte says last month in Lebanon, though, the sensors detected a fire really quickly.

BRINKSCHULTE: The sensors reacted within 30 minutes, so they prevented a potential fire spread.

SCHMITZ: Wow, that's really quick. So what's another way that AI can help in climate solutions?

SIMON: From solar panels to electric vehicles, many climate solutions require minerals. Think lithium, copper, cobalt. The world needs a lot more of these minerals than our current supplies. The question is where to find them. And this is where companies and governments are using AI to help. They're using AI to sift through big data sets to better identify what places around the world have potential for mining these minerals because exploring for minerals - it's really expensive. These mining companies are finding that using AI can save a lot of time and money.

SCHMITZ: OK, so I understand that you have also one more use of AI to tackle climate change.

SIMON: I do. It involves methane, which is this really potent, planet-heating pollution, typically from oil and gas fields, landfills, agriculture. Antoine Halff is chief analyst at Kayrros. It's a climate analytics firm. He says for years, people knew methane emissions were rising in the atmosphere, but...

ANTOINE HALFF: We had no idea where methane was coming from. We had an understanding of the climate risk, but there was no understanding of the sources and therefore very limited scope for action.

SIMON: Then they started using AI to interpret huge troves of satellite data. They now track on a daily basis where the big leaks and other releases of methane are coming from. Kayrros' AI-fueled data - it's being used by the United Nations to verify if companies' reports on methane emissions are accurate.

SCHMITZ: NPR's Julia Simon, thanks so much.

SIMON: Thank you.

(SOUNDBITE OF KUPLA AND PHILANTHROPE'S "NAUTICAL") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Rob Schmitz is NPR's international correspondent based in Berlin, where he covers the human stories of a vast region reckoning with its past while it tries to guide the world toward a brighter future. From his base in the heart of Europe, Schmitz has covered Germany's levelheaded management of the COVID-19 pandemic, the rise of right-wing nationalist politics in Poland and creeping Chinese government influence inside the Czech Republic.
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