🤔 The Fed post-SVB

… and Prop 22’s Cali finale is a big win for Uber and Lyft [Disclosures](   Considering a Pow-se? (Liu Jie/Getty Images)   Yesterday’s Market Moves   Dow Jones 32,155 (+1.06%) S&P 500 3,919 (+1.65%) Nasdaq 11,428 (+2.14%) Bitcoin $24,635 (+1.75%) Dow Jones 32,155 (+1.06%) S&P 500 3,919 (+1.65%) Nasdaq 11,428 (+2.14%) Bitcoin $24,635 (+1.75%) Hey Snackers, In search of a real-life Q: the CIA traveled to Texas this week for the annual SXSW tech conference. The intelligence agency [issued]( an open call to the techy innovators gathered there: help it create "supercharged spies." Stocks popped yesterday after news that inflation cooled last month (as expected). Plus, the government's speedy response to Silicon Valley Bank’s collapse calmed market nerves. Hike Bank failures and slowing inflation could lead the Fed to cool (or even pause) rate hikes J. Powell may need an energy drink… or some chamomile. It’s only Wednesday, but it already feels like next Wednesday. A lot’s happened in the past week that could influence the Fed’s rate-hike decision on March 22. Three banks [collapsed]( (including the second-biggest bank failure in US history) and the February inflation report came out yesterday. - Top line: The pace of inflation cooled for the eighth straight month (good), but it’s not slowing as fast as the Fed would like (not so good). - No surprises: US consumer prices were up 0.4% for the month and 6% for the year, as expected. Energy dropped, but housing costs soared. - Reaction: Stocks popped after the release, and traders priced in an 85% chance that the Fed will hike rates by 25 basis points (down from 50 last week). Seeing the vault half full… [Silvergate]( Silicon Valley Bank, and [Signature Bank]( all collapsed this month. US regulators swooped in with extraordinary measures to guarantee that depositors at SVB and Signature would have access to their funds. Three bank failures in one week may not seem amazing from an economic perspective, but some investors [think]( it could actually be bullish for markets. - Bull case: Some now expect that bank failures will pressure the Fed to cool on rate hikes. Some Wall Street firms are even predicting that Powell will pause hikes (#Pow-se). [Goldman Sachs]( said it no longer expects any hike on March 22 “in light of recent stress in the banking system.” THE TAKEAWAY Panic could force the Fed’s hand… to cool its hiking crusade. The Biden admin and US regulators seem willing to do just about anything to prevent a banking crisis. And while the Fed wants to temper sticky inflation and the hot labor market, it really wants to avoid a crisis. The aggressive interest-rate environment contributed to bank failures and has been one of the main causes of the stock market’s woes. Surge Uber and Lyft spike on California’s Prop 22 win, but the big gig debate isn’t over yet The Prop 22 saga… could be reaching its finale. On Monday, a California court [ruled]( that gig companies can continue to treat their drivers as independent contractors instead of employees under Prop 22. Refresher: in 2021, a CA judge ruled that Prop 22 was unconstitutional and unenforceable, even after CA voters [passed]( the bill. This new decision reverses that. - [Uber]( [Lyft]( and [DoorDash]( shares jumped on the gig-friendly news yesterday, despite the court’s additional ruling that gig companies can’t prevent drivers from joining unions and bargaining for better conditions. Uber by day… DoorDash by moonlight. Workers are increasingly joining the gig economy to earn extra $$. Estimates [vary]( but at least a tenth of the US workforce is made up of gig workers, and analysts predict hundreds of thousands more will join as inflation continues. Meanwhile, Europe [expects]( its 28M gig workers to nearly double by 2025. - The gig model lets people work flexible hours and drive for several companies, but doesn’t offer full-time benefits (think: healthcare and PTO). - As the most populous US state, CA is a critical market for gig companies, and its latest ruling could influence gig law across the country and abroad. THE TAKEAWAY The big gig debate isn’t over… Critics still don’t think Prop 22 provides critical labor protections (like: minimum wage, overtime, and health insurance). Now, many expect that the Service Employees International Union will appeal the ruling to the California Supreme Court. Meanwhile, EU lawmakers are drafting strict new gig-labor laws, which could go into effect next year. DEFI(NE) Heard on the Block: "DeFi" 🤝 Like a banking superapp… without the bank Decentralized finance, aka DeFi, describes peer-to-peer financial services done on the blockchain through smart contracts. Think: borrowing or lending crypto, earning interest, or trading digital assets like NFTs, all without the involvement of a third party like a bank or crypto exchange. This week, the Euler Finance [DeFi protocol]( lost $197M worth of crypto in a flash loan attack. What else we're Snackin' - [SVestigate]( The Justice Department and SEC are reportedly investigating Silicon Valley Bank's [collapse]( including stock sales made by SVB execs shortly before the bank went under last week. - [Techession]( [Meta]( said it’s laying off 10K additional employees after axing 11K in November, in the biggest corporate cut of the year so far. Like other techies, Meta has ushered in “the year of efficiency.” - [Meds]( Pharma giant [Novo Nordisk]( said it’s slashing US insulin prices by up to 75% after a similar move by [Eli Lilly](. The news follows public pressure and legislation aimed at cutting costs for diabetes treatments. - [Volk$]( Watch out, [Tesla]( [Volkswagen]( said it’s going to spend nearly $200B on "electrification and digitization" over the next five years, including plans for a Canadian battery plant and $26K EVs by 2025. - [Spray]( The FDA approved [Pfizer]( new fast-acting nasal spray for treating migraines. The drug’s expected to hit pharmacies by July. FYI: 40M Americans experience migraines each year. 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. Snack Fact Of the Day For the first time since 1987, more vinyl records were sold last year in the US than CDs [Read more]( Wednesday - Retail sales - Earnings expected from Adobe and Five Below Authors of this Snacks own shares: of Tesla and Uber ID: 2792795 Robinhood Snacks newsletters reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC (Member [SIPC]( and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are for informational purposes only, and are not a recommendation of an investment strategy or to buy or sell any security, digital asset (cryptocurrency, etc) in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk including the loss of principal and past performance does not guarantee future results. [Robinhood Terms and Conditions]( • [Disclosure Library]( • [Our Editorial Principles]( • [Contact Us]( • [FAQ]( [Manage Your Subscription Preferences](