Morning Brew Daily
US Dollar Falls to 3-Year Low & Prediction Markets Take on the Next Pope
Tue, 22 Apr 2025
Episode 566: Neal and Toby chat about why the US dollar continues to stumble against world currencies and how gold is having another moment. Then, the world mourns over the passing of Pope Francis and, of course, prediction markets are taking bets on who the next pope will be. Plus, Chipotle plans to open up its first restaurant in Mexico, something other chains have attempted to do but failed. Can Chipotle pull it off? Meanwhile, Toby dives into the Dubai Chocolate trend taking over the world. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Visit https://planetoat.com/ to learn more! Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Hue new? Scientists claim to have found colour no one has seen before | Science | The Guardian Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Who are the hosts of this episode?
Good morning, Brew Daily Show. I'm Neil Fryman. And I'm Toby Howell. Today, Chipotle will open its first locations in Mexico. What could go wrong?
Then in the wake of the Pope's death, people are taking to prediction markets to bet on the outcome of the upcoming conclave. It's Tuesday, April 22nd. Let's ride.
Good morning and happy Earth Day, which takes place every April 22nd to raise awareness around environmental protection. To me, it's an opportunity to reflect on just how many things had to go right for us to be living here. The Earth happens to be located in a remote section of the Milky Way galaxy, which means fewer threats, like a huge star devouring us. As for the star nearby, the Sun,
We have a key magnetic field that deflects its deadly flares. We have a moon that stabilizes the climate, a bodyguard in Jupiter that redirects asteroids and comets from smashing into us, and an active plate tectonic system that produces volcanoes whose eruptions may have led to the first instances of life. And if all that doesn't make us the best planet around, we also have unlimited breadsticks.
Also, just for some more perspective on this Tuesday morning, if Earth's four and a half billion year history was squeezed into a 24 hour clock, humans, you, me, Neil, your neighbor, Paul, everyone you ever know or have known showed up at 11.59, 59 p.m. So remember, we're guests who just got here. So take your shoes off, compliment the decor, and let's try not to leave a mess.
And now a word from our sponsor, Planet O. Neil, have you ever noticed how the right lighting can make a room feel totally different?
Oh, big time. Flip on a warm lamp and suddenly your sad little studio apartment feels like a cozy reading nook.
Ah, thank goodness you said lamp. Team, no overhead lights here. What the right warm lamp does for a room, that's what Planet O does for your morning. Coffee, cereal, smoothie, whatever it touches, it softens the edges, warms things up, makes everything better.
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Chapter 2: Why is the US dollar falling to a 3-year low?
Trump did nothing to alleviate those concerns yesterday, ramping up his criticism of Powell in a post on Truth Social. He called the Fed chair a major loser and demanded Powell lower interest rates immediately, which contributed to the market sell-off. Toby, sinking dollar, sinking bonds, sinking stocks.
It's been a disturbing trend to investors and a sign they are increasingly losing faith in America as a safe haven.
Not a fun combo whatsoever. So what does a weaker dollar actually mean? There are some pros if you're sitting as someone who thinks that U.S. exports should get cheaper. American-made goods cost less overseas, which can technically boost sales for U.S. companies, help domestic factories, farmers, manufacturers, you name it. So it could support U.S.
manufacturing, which is a stated goal of this administration. Companies may start making more things domestically if foreign goods aren't as cheap comparatively, that is a big argument for driving the US dollar down.
Some other less prominent arguments are technically tourism to the US might go up, although we've seen the opposite happen just because of the general attitude that we've adopted towards other countries. And then finally can help pay down foreign debt if the U.S. has debt in dollars, which it does. Paying it off is cheaper relative to other currencies.
But there are also a lot of cons to a weaker dollar. One, imports get more expensive. Stuff made abroad, electronics, clothes, cars, food gets pricier. Remember, we import a lot more than we export. That's the whole basis of this trade war we're conducting. So that can fuel inflation. Then also traveling abroad gets more expensive now. The opposite is true.
Remember how everyone was going to Japan earlier in the year because there was a weaker yen? No more Japan trips for you as the dollar gets cheaper. And then also it just shakes investor confidence. As you said, as this sell America trade keeps percolating through the markets, you're just less confident in the U.S. economy. So that manifests as more volatility and less foreign investment.
So when you hear the dollar is weaker, the dollar just hit a three year low. Hopefully this provides a little more context around what that actually means.
And I also want to turn to the Treasury yields as well, not just the dollar, because those yields are going off. People are selling bonds. This month has been a historic moment in the bond market. I wouldn't be surprised if Michael Lewis would write a book about it one day. We've seen the biggest weekly surge in the yield on 10-year Treasuries in more than two decades.
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Chapter 3: What are the effects of a weaker US dollar on the economy?
And it's downright spooking investors that perhaps foreign investors are lowering their demand or interest in U.S. treasuries.
What ties the bow on what we've been talking about together is gold this year because, I mean, gold is ripping. It is behaving like the Magnificent Seven. So far, gold has outperformed the stock market by 42.5% so far this year. Gold has always been that safe haven asset, but... So Bitcoin has come along and tried to say, hey, we could be a safe, heavy asset.
But that usually kind of correlates more closely with the actual stock market, specifically NASDAQ. So gold, the oldest metal, it is a store of value right now. And it's massively outperforming all these other asset classes that we've been talking about.
Here's a crazy stat. Gold could not move from where it is now in 2025, and it would have its best year since 1980. So just truly a crazy run for gold. Moving on, tributes poured in from across the globe yesterday after the Vatican announced that Pope Francis, the leader of more than one billion Catholics, died at age 88.
In his 12 years as pope, Francis left behind a historic legacy of reform, such as clamping down on the church's financial misdeeds, embracing the global poor and marginalized, and addressing modern threats like climate change and artificial intelligence. But even before Francis' funeral plans were made, a big question came up. Who will be the next pope?
No one will know until a conclave of cardinals chooses the next Catholic leader in one of the most unique and secretive traditions on planet Earth. But that's not stopping people from betting on it. Prediction markets, which surged in popularity during the last presidential election, have once again been thrust into the spotlight over the outcome of a new election on Polly Market.
The prompt, who will be the next pope, has drawn more than $3.5 million in wagers. But that's not all. People are betting on which continent the new pope will be from, or what name he will choose, or whether he'll be selected by May. Overall, the papal market has become one of the biggest active pools on the platform.
Many have criticized this sort of papal wagering as distasteful and perverse, especially when Pope Francis was still alive. But Toby, if you go back in history, there is a long tradition of people wagering on popes.
Yeah, this is certainly not a new thing. The technology is new, but the fact that there was a gambling culture that existed around this is not new. There was a big gambling culture in Renaissance Rome. There were these things called sensalis, which are essentially your bookie who you send memos to on the weekend.
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Chapter 4: Why are Treasury yields rising and what does it mean?
So we'll see how the odds change and what information they're trading on.
Yeah, and by the way, if you think you're going to predict the next Pope, you're probably not because Pope Francis started at 55 to 1 odds and never had better than 32 to 1 odds. So if you think you're going to nail the next papacy, you probably are not. Chipotle is opening a store where no one will mispronounce their name in the very country that inspired its cuisine, Mexico.
The burrito chain is partnering with a restaurant operator who has experience running brands like Domino's and Starbucks. to begin opening outposts in Mexico by 2026.
The hope is that the familiar ingredients will make it a success south of the border, as the company eyes growth outside of the U.S., but just because Chipotle's carnitas, guac, and other offerings take their cues from Mexican dishes, it doesn't mean that Mexicans will actually turn out. No one knows that better than another Mexican-inspired chain, Taco Bell.
It tried to enter the market back in 1992, but was essentially laughed at for its inauthentic naming conventions like Tacostadas, especially when it was juxtaposed next to Mom and Pop Taquerias. It packed up its cheesy gordita crunches and shut down every location just two years later. It's like bringing ice to the Arctic, historian Carlos Montesivas told the AP at the time.
But sometimes the US-ified versions of traditional food and beverage do find success. Starbucks entered the Italian market in 2017 by leaning into humility and a proprietary coffee blend tailor-made for Italian tastes. And now it has 30 stores in operation. So Neil, on a scale of Taco Bell to Starbucks, where do we think Chipotle is going to land?
It could go either way. It totally depends on how they do that. And you can see that by what Taco Bell did because it tried to go into the Mexican market twice, adopting two very different approaches. In the early 90s, when it tried to go into Mexico the first time, it tried to present itself as this authentic taqueria.
They opened in a taco stand and they tried to cater their menu and ingredients to fit into the local mosaic. That didn't work. So then they came back in the 2000s and said, you know, but you're right. We're an American chain that is inspired by Mexican cuisine, but we're not really trying to be a part of your milieu.
So they took out an ad in a newspaper saying one look alone is enough to tell that Taco Bell is not a taqueria. It is a new fast food alternative that does not pretend to be Mexican food. Well, guess what? That didn't work as well. So I'm sure Chipotle is studying this a lot more closely than we are to see what is the right tactic to get people to embrace Chipotle.
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Chapter 5: Why is gold outperforming other assets in 2023?
If you were Chipotle execs, would you go in and try to say like we're one of you or would you adopt the second Taco Bell approach and just be like, yeah, we have burrito bowls. You probably have never heard of that before because we invented it in Colorado. But, you know, that is what we do. And, you know, I think you're going to like it.
I think just lean into the quality aspect. Don't try to be anything you're not. Just say, hey, we make quality ingredients right there in front of you. Come try it if you want it. Up next, we got Toby's Trends. TastyTrade puts traders first.
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Chapter 6: What is the significance of Pope Francis' death and who could be the next pope?
Creamy, crunchy, exacerbating a worldwide shortage of pistachios, Dubai chocolate is the latest TikTok trend that is leading to real world consequences. And it's also the latest Toby's trend that I wanna talk about today. Dubai chocolate is a sweet treat that consists of a milk chocolate bar stuffed with a creamy green pistachio filling
and shredded pastry known as katafi or kanafe, first made by an Emirati chocolatier, Fix. It initially debuted to modest success back in 2021, but that modest success gradually turned into smashing success due to a single TikTok. A video posted in December of 2023
features a girl just eating dubai chocolate in her car the asmr vibes combined with the clearly delicious looking treat has since racked up over 120 million views and it has put some serious strain on its key ingredient one nut trader told the financial times the pistachio world is basically tapped out at the moment with the craze pushing prices to over 10 a pound a 34% rise in just a year.
And one chocolate shop in the UK sells Dubai chocolate at more than double the price of its other bars. It does look like the only thing that can slow Dubai chocolate's roll now is shortages. The US pistachio industry is coming off a poor harvest, and now it's got to contend with half of TikTok clamoring for this delicious new treat, Neil.
Chapter 7: How do prediction markets work for choosing the next pope?
This is a very cool example of guerrilla marketing, too, because the bars were first invented in 2021 by this British Egyptian woman living in Dubai, Sarah Hamouda. And she made these bars while she was pregnant because she wanted to, you know, kind of indulge herself. And she sent all these bars to a bunch of local influencers and said, hey, you want to try my chocolate?
This is, you know, a tactic that a lot of people do when they're creating a product. They're going to send it to influencers and see whether they make a video about it that happens to go viral. And, you know, one caught on. He racked up so many millions of views and led to a global craze.
That's you know, I've never had this, but, you know, you can't get it anywhere because it sells out in multiple hours when they when these stores have it in stock. It's leading to a global shortage of pistachios. So an absolute an absolute sensation.
One interesting aspect of this is the U.S. is actually pistachios, the world leader in exporting pistachios. That's one thing we do export. And when I say that the U.S. crop, the U.S., the most recent U.S. crop had a shortage, it was actually because they had a higher quality than usual crop, leaving fewer of the cheaper, you know, shell-free kernels that
usually are used as ingredients in stuff like baking or chocolate. So it was almost too good of a harvest season for the United States. And also it's coming off of a year where there was a supply glut in 2023. So suddenly there was like this global supply exceeding demand back in 2023. So maybe that coincided with the fact that a lot of chocolatiers were experimenting around with this ingredient.
And so it's been like the worst of both worlds where they're like, all right, there's going to be a lot of pistachios because we're in this supply glut environment. Now there's a supply shortage and prices are kind of skyrocketing and leading to Dubai chocolate being very expensive as well.
Well, I need to get my hands on this because it looks so good. Delicious. Okay, let's sprint to the finish with some final headlines.
In its monumental battle against the Trump administration, Harvard has turned the volume up to 11, filing a federal lawsuit yesterday against the government for illegally freezing $2.2 billion in funding and threatening its academic independence as part of an anti-Semitism crackdown at colleges.
The country's wealthiest college accused the government of violating the First Amendment by attempting to use financial leverage to, quote, gain control of academic decision making at Harvard.
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Chapter 8: Can Chipotle succeed in opening its first restaurants in Mexico?
Alan Garber, the university's president, said the consequences of the government's overreach will be severe and long lasting, saying that funding cuts imperil research into things like child cancer and infectious disease outbreaks. The White House replied to the suit by saying taxpayer funds are a privilege and and Harvard fails to meet the basic conditions required to access that privilege.
The gloves are officially off.
Yeah, after Harvard took this stand and filed this lawsuit, over 150 university leaders from other U.S. universities signed this joint statement where they were pushing back against what they see as government overreach on college campuses. They specifically called out the use of federal funding as this sort of pressure lever to get these universities to do what the administration wants.
So it's big names, MIT, Princeton, Yale, Brown, Tufts, Duke, you name it, they were among the signers. So you're seeing higher ed kind of rally behind Harvard here. as they fight what they see as overreach from this administration. For our next headline, Airbnb users rejoice. The short-term rental company is finally being transparent about the fees it charges. You know the feeling.
You're cruising around on Airbnb's search function, find the perfect little cottage upstate for a weekend getaway for the right price, and then you click it and boom! hit in the face by taxes and fees galore, pushing it right out of your price range.
It was always a huge pain point for users, but that changed as of Monday, with the platform now displaying the total price, fees and all, right from the outset and by default. This change aligns with the new USFTC rule, which requires rental platforms and hotels to disclose all fees transparently before purchase to prevent hidden junk fees. Neil, feels like a big win for consumers.
It is, and they can thank the FTC for that, for instituting this rule. What I'm going to be looking for is whether this leads to any pricing changes or any pricing decrease among hosts, because the pricing will be far more transparent as you're scanning, and there may be some indications that hosts will lower their prices, because...
In 2023, Airbnb introduced an optional toggle button that you could show the prices with fees or without fees. And Airbnb, in a blog post last year, said that after they introduced this toggle button, hosts behind nearly 300,000 listings removed or lowered their cleaning fees in the months following its introduction. So I wonder how this will affect pricing on Airbnb.
And you're not the only one using ChatGPT to do your work for you. The United Arab Emirates announced that it will begin using artificial intelligence to write new laws and review existing ones in the world's most ambitious plan yet to fuse generative AI and government. The goal, according to UAE leaders, is to make the legislative process more responsive agile, and efficient.
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