DAVID GREENE, HOST:
This is shaping up to be another tumultuous day in the financial markets. Stock prices are already falling this morning, and this comes after a big selloff in Asia and Europe. Once again, the turmoil seems to have started in China. And we have NPR's Jim Zarroli on the line to help us understand this. Jim, good morning.
JIM ZARROLI, BYLINE: Good morning.
GREENE: So the markets have just opened in New York, is that right? What are we seeing so far?
ZARROLI: Yeah, we're seeing the markets begin to fall. The futures had indicated that the markets would fall, and they are. They are down quite a bit already. Now, that could - the other day the same thing happened. And, of course, they were down for much of the day and came back, so you never really know what's going to happen.
GREENE: And that's what's good about the markets.
GREENE: You can watch them and follow along and not always predict. But - so I understand that - I mean, China trading actually had to be suspended by the government because things fell so much. Can you take us through what happened there?
ZARROLI: Yeah, China has these new circuit breakers, which the U.S. stock markets also have. They're supposed to curb volatility. So when prices fall enough, trading is suspended for 15 minutes. And then if they keep falling, trading is suspended for the rest of the day. Now, they've only been in place this week, but they've already had to be activated twice - Monday and then again today. Today, in fact, trading was shut down after just 29 minutes. So as you can imagine, a lot of angry investors out there who wanted to sell and were told they couldn't.
GREENE: And probably, others have said, that that reaction by the government might be one thing that's making investors even more nervous about things.
ZARROLI: Yeah, yeah, I think there is in general a lot - there are a lot of questions about what the government is doing right now. I think the initial cause today was that China allowed its currency to fall lower, which is something it does when it wants to stimulate the economy. So I think people are thinking, you know, why is China doing this? Why is the government taking these steps? I think the broader problem is that the leadership in Beijing is just losing credibility. You know, China, of course, has always been a top-down economy, and the government has been steering the economy well - very well for a long time. But there's a feeling now sort of it's losing its grip. So what does that mean for the rest of the world? I mean, China is so big and its consequences have actions - I mean, its actions have consequences all over the world, and we're feeling that now.
GREENE: And how - in what ways - I mean, in addition to stock prices falling in the United States - might we really feel this reverberate here?
ZARROLI: Well, I mean, one of the ways is that - the interesting thing that's going on right now is that - you know, there are markets that bet on the Federal Reserve, what it's going to do. And they're starting to see less of a likelihood that interest rates are going to keep going down. I mean, you remember December, you had the Fed raise one key interest rate by a quarter point. And that was because, you know, the U.S. economy has improved so much and the labor market has gotten better. And everyone was predicting oh, you know, we're going to see more rates rising, maybe four rate increases this year. But now a lot of people are looking at that and saying, you know, not so fast. Another thing, of course, is oil prices. They've come down so much, and they keep going down. And they went down further today after this turmoil in China. Brent Crude, which is one of the important benchmarks was actually down to $32.16 cents a barrel, which is as low as it has been in 11 years. And this is partly because of the glut in oil that we have. But it's also because people are worried about, you know, demand. As the economy, you know, slows...
ZARROLI: ...Commodity prices fall.
GREENE: All right, watching a very tumultuous day on the markets, a big fall in stocks in China and already starting with the fall on stocks here in the United States - speaking about that with NPR's Jim Zarroli. Jim, thanks a lot.
ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.