The Fed slams the emergency brakes...
June 16, 2022 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( TOGETHER WITH [Fundrise]( Good morning. This is quite the stat: San Francisco is the only major metro area in the US where rent prices are lower now than they were before Covid hit in March 2020. âNeal Freyman, Matty Merritt, Jamie Wilde, and making his newsletter deBrew, intern Joseph Abrams MARKETS Nasdaq 11,099.15 +2.50% S&P 3,789.99 +1.46% Dow 30,668.53 +1.00% 10-Year 3.289% -19.2 bps Bitcoin $22,429.95 +3.94% Netflix $180.11 +7.50% *Stock data as of market close, cryptocurrency data as of 8:00pm ET. [Here's what these numbers mean.]( - Markets: Investors gave a [standing O]( to the Fedâs biggest rate hike in decades. The S&P snapped a five-day losing streak (though itâs still in a bear market), and the Nasdaq soared thanks to a surge in tech shares. ECONOMY [The Fed slams the emergency brakes](
[Jerome Powell](Win McNamee/Getty Images In its quest to fight soaring inflation, the Federal Reserve is trying to throttle the economy like itâs a three-year-old iPhone. The central bank [hiked interest rates]( by a mammoth 75 basis points (bps) yesterday, which is the biggest rate increase since 1994. Through interest rate increases, the Fed is attempting to raise the cost to borrow money, slow economic activity, and bring down inflation thatâs ripping at 40-year-highs. How we got here With all due respect to the Boston Celtics, the current bout of inflation wins the award for overachiever of the decade. In 2021, Fed officials deemed inflation a âtransitoryâ consequence of pandemic reopenings. But due to a mix of resilient consumer demand, persistent logistics bottlenecks, Covid lockdowns in China, and the outbreak of war in Ukraine, prices kept going up. Even as recently as just a few weeks ago, policymakers signaled they would be hiking rates by 50 bps. But pricesâyou know whatâs coming nextâhave continued to climb. Last Fridayâs consumer price index showed that inflation jumped to 8.6% in May, a huge disappointment to the many economists who thought it might have peaked, and an omen that the Fed had to hike rates by an even greater amount. And what comes next? Even more rate increases. The Fed projected that it would hike rates by another 175 bps by the end of the year, to a level far above what it estimated in March. But Fed Chair Jerome Powell, in a press conference yesterday, suggested that an âunusually largeâ 75 bps increase wouldnât be the norm going forward, though it is possible at the Fedâs next meeting in July. Hiking interest rates this hard, this fast will be painful for the economy and likely put some people out of work. Thatâs the point, after allâpeople need to spend less for prices to come back down to earth. And it seems like thatâs already happening: US retail sales fell for the first time in five months in May, as Americans pulled back on buying cars and other expensive items. Big picture: As much as Americans love to think weâre exceptional, inflation has been [afflicting]( countries around the globe. In an analysis of 111 countries, Deutsche Bank found that the USâ inflation rate sits roughly in the middle.âNF Â Â Â mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=The%20Fed%20slams%20the%20emergency%20brakes%3A%20https%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fstories%2F2022%2F06%2F15%2Fthe-fed-slams-the-emergency-brakes-on-the-economy%3Futm_campaign%3Dmb%26utm_medium%3Dnewsletter%26utm_source%3Dmorning_brew%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3Da905682a%26utm_source%3Demail_share%0A TOGETHER WITH FUNDRISE [Sit. Stay. Invest.](
[Fundrise]( They say you canât teach an old dog new tricks, but you can get your portfolio to do something pretty cool: It can fetch you both growth and stability. So, how does one create such a clever portfolio? Simple: Get its owner to use [Fundrise](. Their easy-to-use platform is changing the game when it comes to investing in premium real estate, an asset class known for generating long-term wealth and portfolio stabilization. Because real estate is essential to our everyday lives, itâs intrinsically valuable. Now Fundrise is making [investing in high-end real estate]( simple and accessible for everyone, offering a level of diversification previously reserved for the wealthiest investors on, well, earth. With flexible minimums and a simple sign-up, you can create an impressive portfolio in no time. [Get started today](. WORLD [Tour de headlines](#)
[A needle and bandaids]Francis Scialabba Covid shots for tots are almost cleared for takeoff. An FDA advisory committee unanimously [recommended]( Modernaâs and Pfizerâs Covid vaccines for kids under five, which is the only age cohort in the US that doesnât yet have an authorized vaccine. The FDA is expected to accept these recommendations and authorize the vaccines by the end of the week, setting up a vaccine rollout as soon as next Tuesday. Facebookâs on its copycat grind again. A newly surfaced exchange between Facebook higher-ups in April shows how the platform may be trying to copy the features of one of its main competitors: TikTok. In a memo leaked to [The Verge](, head of Facebook Tom Alison said that he wanted to tweak the siteâs homepage to one more reminiscent of TikTokâs âFor Youâ page, meaning that popular content from around the app will be prioritized above pics of your former high school classmates. As part of this pivot, Messenger would be mashed back together with Facebook, which it split from in 2014. One pandemic origin story solved. Scientists say theyâve [discovered]( where the Black Death originated: Central Asia, in modern-day Kyrgyzstan. Itâs a breakthrough that helps us better understand the causes of the deadliest pandemic on record, which killed up to 60% of the Eurasian population between 1346â1353 AD. If a similar timeline is applied to the current pandemic, we can expect to discover how Covid began around the year 2700. AUTO [Tesla leads rivals in semi-autonomous vehicle crashes, butâ¦](
[Tesla Autopilot in action](Tesla Tesla vehicles were involved in [more crashes]( while using driver assistance technology than any other carmaker, according to a new report from the National Highway Traffic Safety Administration (NHTSA). Itâs the first report of its kind, and reflects how the regulator is increasing its scrutiny of self-driving tech. FYI, the vehicles in this report are more Herbie than Bumblebee. They use features like lane assistance and auto-adjusting cruise control, and require a driver behind the wheel at all times. What the report showed: Out of 392 total crashes reported to the NHTSA over the year ending May 21, Tesla accounted for 273, Honda for 90, and the other 100+ companies included in the survey reported 10 or fewer crashes each. But that doesnât necessarily mean Teslas belong in Twisted Metal, because⦠- There are simply more Tesla vehicles using driver-assist technology on the road than from other brands.
- Tesla vehicles auto-report crash data via wi-fi and cellular connections, while other automakers mostly rely on customer reports. Basically, âThe data may raise more questions than it may answer,â NHTSA administrator Steven Cliff said. Still, the report provides more leverage for critics of a Tesla Autopilot system that is already under loads of pressure. Just last week, the NHTSA upgraded its probe of Teslaâs driving assistance system to an âengineering analysis,â which could lead to a recall.âJW Â Â Â mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=Tesla%20leads%20rivals%20in%20semi-autonomous%20vehicle%20crashes%2C%20but%E2%80%A6%3A%20https%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fstories%2Ftesla-leads-rivals-in-semi-autonomous-vehicle-crashes%3Futm_campaign%3Dmb%26utm_medium%3Dnewsletter%26utm_source%3Dmorning_brew%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3Da905682a%26utm_source%3Demail_share%0A GROCERY [We're running out of ways to get string cheese in 15 minutes](
[Delivery bike fades from US map.](Francis Scialabba Jokr has entered its Joker arc. The ultrafast delivery service that has raised $430 million to date said yesterday that itâs [slashing]( its US operations to focus on its more profitable business in Latin America. The company, which hit unicorn status last December (less than a year after it was founded), joins the growing list of 15-minute delivery startups shuttering operations faster than they can deliver a pack of Chobani. The delivery service said it would close nine micro-fulfillment centers in Boston and New York and lay off around 5% of its staff. But compared to the recent challenges faced by its speedy friends, itâs getting off pretty easy. - 1520 was the first super fast delivery startup to close up shop in December.
- Buyk, the US subsidiary of a popular Russian grocery delivery service, declared bankruptcy in March, just 16 days into Russiaâs invasion of Ukraine.
- Fridge No More became Funding No More after a potential deal with DoorDash fell through in March.
- Even GoPuff, which hit a $15 billion valuation last July, laid off 3% of its staff in March, quashing rumors that it would be throwing an IPO tailgate in the near future. Bottom line: Last year, VCs [poured]( hundreds of millions into 15-minute-delivery startups in hopes that theyâd revolutionize the way urbanites shopped for groceries. But now, during a period of rising interest rates and unstable markets, investors are losing their appetite for risky bets.âMM Â Â Â mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=We%27re%20running%20out%20of%20ways%20to%20get%20string%20cheese%20in%2015%20minutes%3A%20https%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fstories%2F15-minute-delivery-service-jokr-is-slashing-us-operations%3Futm_campaign%3Dmb%26utm_medium%3Dnewsletter%26utm_source%3Dmorning_brew%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3Da905682a%26utm_source%3Demail_share%0A GRAB BAG [Key performance indicators](#)
[Squid game character saying we're excited to welcome you]Squid Game/Netflix via Giphy Stat: Netflix announced a [Squid Game reality show]( in which 456 contestants will play a series of games âinspired by the original showâ (but hopefully not too inspired). The winner will take home $4.56 millionâwhich the company says is the biggest âlump cash prize in reality TV history.â Quote: â100% based on greater fool theory.â Thatâs what Bill Gates [thinks about NFTs](. Itâs not exactly an endearing characterization: Greater fool theory states that during a market bubble, an investor can make money by purchasing a risky asset because there will always be someone dumb enough to buy it from them at a higher price. Read: Inside a corporate culture war stoked by a crypto CEO. ([New York Times]() BREW'S BETS Fast-food pricing 101: The former pricing manager for Wendyâs describes why cheap burgers cost what they do in this [informative thread](. Highly useful: [How to tie a heel lock]( for a running shoe. Mascara that mimics the look of extensions: This best-selling mascara gives you that salon-perfect look sans the expensive pricing, annoying clumping, or unwanted smudging. [Brew readers get 15% off their entire order](.* Besties go shopping: For groceries, that is. Check out this quiz we made with Amazon Ads that reveals how adult Gen Zers fill up their carts (and free time). [Test your knowledge here](.* *This is sponsored advertising content. WHAT ELSE IS BREWING - [The white man]( accused of killing 10 Black people in a Buffalo supermarket was charged with federal hate crimes, which means prosecutors could seek the death penalty.
- [Lego]( will spend more than $1 billion on a new factory in Virginiaâits second in North America and seventh in total.
- [Dr. Fauci]( tested positive for Covid-19. He has mild symptoms, according to a statement from the NIH.
- [Elon Musk]( will answer questions directly from Twitter employees for the first time at an all-hands meeting today.
- [Golfâs US Open tees off this morning](. Because the event is run by the USGA and not the PGA Tour, players whoâve defected to LIV Golf, such as Phil Mickelson, will still be competing. FROM THE CREW [Everyone feels like an imposter](
[Everyone feels like an imposter]( On Imposters, we sit down with titans of industry, sports, and entertainment to discuss the personal challenges theyâve overcome to get where they are today. Itâs honest, raw, and a reminder that weâre all just doing the best we can. Check out some recent popular episodes: - How Olympic gymnast Shawn Johnson East [overcame her eating disorder](
- Gen-Z phenom Jacob Sartorius on [embracing his bullies](
- For Bethenny Frankel, [building a $100 million business was personal]( This editorial content is supported by Sakara. GAMES [The puzzle section](#) Brew Mini: âFantasy role-playing game featured in Stranger Things, for shortâ (3 letters) is your sample clue for todayâs Mini crossword. [Play it here](. Three headlines and a lie Three of these headlines are real and one is faker than your happy hour promise to attend a 6am workout class. Can you guess the odd one out? - Rats [fitted]( with tiny backpacks are being trained to help earthquake survivors
- Mom and teenage son [create]( âFirst Time Sex Starter Kitâ
- Slackâs CEO [thinks]( a dating app for coworkers could be in the companyâs future
- Want 100 cockroaches in your home? NC company will [pay you]( as it tests a new pest control method. If you love Three Headlines and a Lie, [play along]( on The Refresh from Insider and dive deeper into these bizarre news stories. [In the bathroom with your boss? A tutorial...](#)
[In the bathroom with your boss? A tutorial...] Youâre in the work bathroom when your boss walks in and starts a conversation, even after they enter a stall. What would you do? [This is Office Politics: where we deal with your work problems so HR doesnât have to.]( Donât miss out on more from the Brew: Money with Katie explains how the victim vs. victor dynamic shapes our financial outcomes. [Listen]( or [watch]( now. Emerging Tech Brew is the only tech newsletter you need in your inbox. It covers AI, climate tech, drone delivery, and much more. [Sign up for free](. SHARE THE BREW [Share Morning Brew]( with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag. Weâre saying weâll give you free stuff and more friends if you share a link. One link. Your referral count: 0 [Click to Share]( Or copy & paste your referral link to others:
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