🏦 The great rate-hike divide

…and speedy shipping takes a breather [Disclosures](   When omelets are back on the menu (Brandon Bell/Getty Images)   Yesterday’s Market Moves   Dow Jones 33,647 (-0.11%) S&P 500 4,092 (-0.41%) Nasdaq 11,929 (-0.85%) Bitcoin $29,968 (-0.94%) Dow Jones 33,647 (-0.11%) S&P 500 4,092 (-0.41%) Nasdaq 11,929 (-0.85%) Bitcoin $29,968 (-0.94%) Hey Snackers, Sometimes the bathroom's truly for customers only: some [Starbucks]( shoppers said the coffee chain's new olive-oil-infused bevy has [caused]( upset stomachs and hurried toilet trips. Sounds like a grande problem. Stocks ticked down yesterday after a report showed that last month’s consumer prices rose only slightly less than economists had predicted. About that… Torn Inflation came in cooler than expected in March, leaving Fed officials and Wall Street divided over the path for rate hikes Hot off the BLS press… The US just got its inflation report card for March, and the [results]( were… interesting. Consumer prices rose 0.1% for the month, but less than Wall Street’s expected 0.2% climb. Stocks were mixed after the #s dropped, as investors questioned whether the mellower-than-expected data could (finally) lead to a rate-hike pause. The report's timing is key: yesterday’s inflation data came after March’s banking [blowup]( and before the Fed’s expected early-May rate decision. - Sunny side up: Grocery prices fell 0.2% in March, marking the first decline since 2020. Egg prices also started to crack, plunging more than 10% from February highs. - Upside down: Rising shelter prices (like: rent, hotel costs) were the main driver of rising consumer prices, even as rent growth cooled. The great rate-hike divide… Fed Chair Powell has been loud about staying the course of raising rates to crush inflation. Despite that, earlier this month banking worries and underwhelming labor data had traders betting on only a 43% chance that the Fed would hike interest rates in May. After yesterday's mixed report (think: still high inflation that's showing signs of easing), those odds stood at nearly 70%. Muddying things, earlier this week two Fed presidents expressed contrasting views over whether more hikes would be needed to curb inflation. THE TAKEAWAY Staying the course can lead to a fork in the road… Fed officials' divided statements, plus mixed economic predictions, have led to softer rate rhetoric. Yesterday, [Goldman Sachs]( said it no longer expected the Fed to raise rates in June. Traders also bolstered their belief that the Fed would reverse course by summer’s end, with rates ending the year nearly half a percentage point lower. Speed Ecommerce’s delivery sprint is slowing to a jog as consumer habits shift It’s not about the journey… it’s about how much it costs to get to the destination. The early pandemic race that saw delivery speeds approaching Mach levels (at discount prices) is [slowing](. Now big online retailers are raising shipping costs and shifting what “free shipping” means: - New terms: At the end of February, [Amazon]( bumped the minimum purchase total for its free grocery-delivery service to $150 (up from $35). - More-to-door: [FedEx]( and [UPS]( said they're raising their rates by an average of 7%. - For a price: [Nike]( and [Best Buy]( offer free shipping as a membership-program perk (the cost: shared personal data). Timing isn’t everything… Determined to keep order totals low, consumers are increasingly opting for longer (that is: cheaper) wait times over costlier fast delivery. The number of packages delivered through Amazon’s shipping option that credits customers up to $1.50 for choosing slower delivery has doubled since 2020, the company said. Meanwhile, a recent survey of online shoppers found that 41% rank shipping cost as their top priority when placing an order (up from 33%), while 22% rank delivery speed as the most important factor (down from 29%). It seems shoppers aren't in a rush: another survey found that 85% of what’s ordered online isn’t opened for days. THE TAKEAWAY Fast isn’t worth the cost of free… With higher retail and grocery costs eating into shoppers’ budgets, many are opting to practice patience when it comes to their online buys. For retailers who’ve used fast, free shipping to gain an edge, stemming losses from higher shipping costs without alienating customers is a careful dance. What else we're Snackin' - [MopUp]( [Walmart]( said it’s closing four unprofitable Chicago stores after deciding earlier this year to shutter locations in Portland and DC. The big-box behemoth has struggled with its urban stores' profitability. - [Sweet]( The price of raw sugar has shown signs of easing after rising 17% this year. The price (the highest in a decade) could lead to increased costs for food and drink makers, and to higher grocery bills. - [Whoops]( Ernst & Young scuttled a $100M plan to split its auditing and consulting biz into two (the goal: reduce conflicts of interest). The Big Four firm reportedly failed to account for internal opposition. - [$nail]( The USPS said it's raising the cost of a first-class stamp to 66 cents (from 63 ) in July. The agency said the increase — the fourth in two years — would help ease inflation's effect on its expenses. - [VFlee]( Last quarter, VC funding for crypto startups plummeted 80% on the year. While [bitcoin]( has surged 80% year to date, the crypto industry faces [increased]( regulatory scrutiny following FTX's failure. 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. 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