Investors Question Kevin Warsh’s Credibility & People Are Talking Less?
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What is the main topic discussed in this episode?
Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Wall Street staged a revolt after the Fed beating.
Then, Meta and Microsoft reported earnings, and they're still spending on AI like they stole their parents' credit card. It's Thursday, July 30th. Let's ride.
One of the most bizarre business stories of the past few years has reached a resolution. This week, eBay agreed to a $56 million settlement with two Massachusetts journalists who had been harassed and stalked by company security personnel in 2019. The TLDR is, back then, eBay was catching heat from an activist investor, and this couple, the Steiners, who ran the website eCommerceBytes, were posting unflattering articles about the company. Then the freaky mail started showing up. For a period, the Steiners began to receive packages of live cockroaches, a bloody pig mask, a funeral wreath, and a book on surviving the loss of a spouse. Turns out this campaign was all orchestrated by some eBay executives to get the couple to shut up.
eBay has apologized, saying what the Steiners were subjected to by former eBay employees in 2018 was wrong, reprehensible, and should never have happened.
I remember covering this story when I first joined the brew five or six years ago. It was crazy then, and it's still crazy now. It also got me thinking, though. We talk a lot about companies on this podcast. Who's going to send us live cockroaches and a bloody pig Halloween mask? The only answer I could come up with was Chipotle, not because of what we say about them, but because of how many times I've mispronounced it. Chipotle, Chipotle, Chipotle, if any... Chipotle execs are listening to this. A carnitas burrito instead of a bloody pig Halloween mask, please. Which, now that I think about it, are actually kind of the same thing. And now a word from our sponsor, Anthropic, the team behind Claude.
Toby and I tackle a lot of hard-hitting questions here at Morning Brew Daily. Like, who keeps stealing my lunch? No, like, will AI take people's jobs?
Anthropic, the public benefit corporation behind Claude, heard questions like that over and over in more than 120,000 interviews about people's hopes and fears around AI. So they published contingency plans for the hard unemployment scenarios, not just the rosy ones.
And they just launched Claude Core, a $150 million fellowship paying 1,000 people full salaries to work at nonprofits while training for AI-era careers.
So if you've got your own hard questions about AI, head to claude.ai.mbd to submit it to Anthropic and explore how they are answering them. That's C-L-A-U-D-E dot A-I slash M-B-D. The Fed held its meeting yesterday to decide what to do with interest rates. And it feels like we're in a situationship with Kevin Warsh, given how deliberately bad at communicating he's been about his plans to tame inflation. Markets expected the Fed to do absolutely nothing and hold rates steady, but there was still a roughly one in three chance of a surprise rate hike. In the normally predictable world of central banking, it made for an exciting lead-in. In the end, the Fed voted 9-3 to keep rates the same, but that 3 is the headline.
Three officials wanted a quarter-point hike, the first time since 2016 that three policymakers have dissented in the same direction. You can understand why there's a split. Data shows that the economy is still growing at a solid pace, the labor market remains stable, and recent inflation readings have cooled slightly. But inflation has also been above the Fed's 2% target for more than five years now, while tariffs and higher energy prices from the war in the Middle East are a constant inflationary threat. For new Fed Chair Kevin Wurst, the split Fed also puts his communication experiment to the test. He's been very vocal about not being vocal. deliberately trying to wean markets off the Fed's traditional forward guidance, and yesterday was no different.
The statement the committee put out was much shorter than traditional Fed statements.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–13:37
2
What happened at the Fed meeting and why did three members want to hike rates?
13:37–17:42
3
Why do investors question Kevin Warsh’s credibility after the Fed's brief statement?
17:42–22:47
4
How did bond and equity markets react to the Fed hold decision?
22:47–28:47
Speakers
2 identifiedMore from Morning Brew Daily
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