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Powell prepares for the soft landing...
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May 05, 2022 View Online | Sign Up | Shop

Morning Brew

Good morning and Happy Cinco de Mayo. The holiday commemorates the defeat of French forces by the Mexican army at the Battle of Puebla in 1862, but its popularity jumped in the 1980s, when beer companies leveraged it in aggressive marketing campaigns.

Now, Cinco de Mayo is a day for celebrating Mexican culture and, interestingly, it's way more popular in the US than in Mexico.

Neal Freyman, Matty Merritt, Jamie Wilde

MARKETS

Nasdaq

12,964.86

S&P

4,300.17

Dow

34,061.06

10-Year

2.963%

Bitcoin

$39,828.02

Lyft

$21.56

*Stock data as of market close, cryptocurrency data as of 7:00pm ET. Here's what these numbers mean.

  • Markets: Stocks boomed after Fed Chair Jerome Powell spoke their love language. Though he announced a meaty rate hike yesterday to cool the economy, he also ruled out an even bigger hike in the future…which would have indicated something really disastrous is going on.
  • Stock spotlight: Lyft…yeesh. The ride-hailing company lost nearly 30% of its value after its profit outlook came in way below forecasts ("We do not like that," co-founder John Zimmer told Yahoo Finance). Uber tried to distance itself from its ailing rival, saying that it does not need to spend money recruiting drivers like Lyft does.

ECONOMY

He's fed up with inflation

Jerome Powell Win McNamee/Getty Images

We save all the worst puns for the biggest central bank meetings.

Fed Chair Jerome Powell jacked up interest rates by a half-percentage point yesterday. It's a) the largest rate increase since 2000 and b) the first time since 2006 that the Fed has increased rates in back-to-back meetings.

It's not an ordinary move, but these aren't ordinary times. Consumer prices surged 8.5% annually in March, the highest rate in 41 years and far above the Fed's 2% target. Given that keeping prices stable is one of the Fed's main responsibilities, critics say it's been a total slacker over the past year and needs to get hiking to bring down inflation from its stratospheric heights.

The Fed has heard that message. "Inflation is much too high, and we understand the hardship it is causing," Powell said at a press conference yesterday—the first one he's held in-person since the pandemic began. "We're moving expeditiously to bring it back down."

But hiking interest rates is just one tool the Fed plans to use to bring inflation back down. Another way for the Fed to slam the brakes on the economy is to reduce the size of its swollen $9 trillion balance sheet, which it plans to do in June.

This plan is not without its perils

Bringing down inflation without causing a recession requires more precision than winning at the claw machine. And some leaders are giving Powell a slim chance of pulling it off.

  • JPMorgan CEO Jamie Dimon pegged the probability of a recession at 33% and a "soft landing" (lower inflation, no recession) also at 33%.
  • Even Janet Yellen, the current Treasury Secretary and former Fed Chair, said Powell would need to be "skillful and lucky" to get this plane on the ground without hurting anyone.

Powell says you're all underestimating his monetary policy skills. Citing the strong labor market and financially robust consumers and businesses, he said, "We have a good chance to have a soft or softish landing." Precisely what you want to hear from a pilot.—NF

        

FROM THE CREW

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Download the MB/L syllabus now to learn more.

WORLD

Tour de headlines

Flags planted in DC to remember the lives lost due to Covid Kent Nishimura / Los Angeles Times via Getty Images

Covid deaths in the US pass 1 million. The country hit the milestone just 27 months after the first Covid-19 case was confirmed, according to NBC News. 1 million is roughly the population of San Jose, California, and is the highest recorded death toll from the virus out of any country.

TurboTax to pay back millions of tax filers. TurboTax's parent company, Intuit, agreed to a settlement with all 50 states' attorneys general over its advertising of its tax filing services as "free, free, free," when they were in fact not free x3. Intuit will shell out $141 million to 4.4 million low-income customers who were eligible for the IRS's Free File program—as well as fix its allegedly deceptive ad practices.

Puzzles are big business. The NYT said that Wordle, which it bought for an amount in the low-seven figures in January, brought in "tens of millions of new users" to the Times and contributed to the best quarter for net new subs for the Games unit ever. The NYT's other recent acquisition, The Athletic, will be introduced into the Times's subscription bundle in the second half of the year.

HEALTHCARE

Cerebral pulls a pill pause

Box of pill bottles Francis Scialabba

The TikTok ads mashing up a list of ADHD symptoms and dance trends might start to disappear.

Cerebral, the mental health telehealth startup, said yesterday it would pause Adderall and other ADHD medication prescriptions for new patients. The move comes amid growing concern that the startup's prescription-writing practices are about as strict as a public school dress code. Just a few days ago, the company's preferred pharmacy, Truepill, said it would no longer fulfill or deliver prescriptions for controlled substances like Adderall and Vyvanse.

The pandemic: If Zoom and Peloton were pandemic darlings, Cerebral was the lockdown diamond. Co-founded in 2020 by Ho Anh and current CEO Kyle Robertson, the online mental health provider expanded to all 50 states, registered 200,000+ patients in just two years, and signed Olympic gymnast and mental health advocate Simone Biles as its Chief Impact Officer. Following a funding round led by SoftBank last December, Cerebral was valued at $4.8 billion.

But that growth may have come at a cost. Some former employees accuse Cerebral of overprescribing meds, overworking providers, and overmarketing on social apps. Just last week, Cerebral's former VP of product and engineering sued the company for overprescribing ADHD meds.—MM

        

PEOPLE

The man with the shortest resume ever

Orthmann holding his Guinness plaque Guinness World Records

What if you got your first job, and then just…never quit? That's what 100-year-old Walter Orthmann did. The Brazilian recently set a Guinness World Record for spending his 84-year career at a single company.

Quick bio: At 15, Orthmann started as a shipping assistant at the textile company Industrias Renaux S.A. That was in 1938, the same year Hitler invaded Austria and the ballpoint pen was invented.

Eventually, Orthmann climbed the ladder to become a sales manager, and he's stayed in that position ever since with no plans to retire. Why? He told Guinness World Records: "I don't do much planning, nor care much about tomorrow. All I care about is that tomorrow will be another day in which I will wake up, get up, exercise, and go to work; you need to get busy with the present, not the past or the future. Here and now is what counts. So, let's go to work!"—JW

        

GRAB BAG

Key performance indicators

Dave Chapelle Tim Nwachukwu/Getty Images

Quote: "Whenever you're in trouble, Jamie Foxx will show up in a sheriff's hat."

Dave Chappelle was heard on video thanking his friends (including Foxx) for helping him recover after a man armed with a replica gun attacked him while performing at a Netflix comedy festival Tuesday night. Chappelle was the center of controversy last fall when he was accused of making transphobic comments in his Netflix special.

Stat: The jersey worn by Argentina's Diego Maradona when he scored the famous "Hand of God" goal in the 1986 World Cup just sold for $9.3 million at a Sotheby's auction. It's the most expensive piece of sports memorabilia ever sold at auction, topping the $8.8 million paid for the original modern Olympic manifesto in New York in 2019.

Read: Why are American chips so boring? (Eater)

TOGETHER WITH PANERA BREAD®

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BREW'S BETS

Just fun: A super feel-good moment, logos you can see from space, and cars vs. giant bulge.

Drinkify: You pick the music, and they'll pick the drink.

Good podcast listens:

WHAT ELSE IS BREWING

  • Venture capitalist John Doerr is donating $1.1 billion to Stanford University to create a new school for climate change and sustainability studies.
  • Cameo, the service that lets you ask a celebrity to roast your friends, is reportedly laying off more than one-quarter of its workforce.
  • The White House is considering issuing grants to make emergency contraception more accessible if SCOTUS overturns Roe v. Wade.
  • Amber Heard took the stand yesterday to testify in her and ex-husband Johnny Depp's highly publicized libel trial.
  • Eminem, Pat Benatar, and Lionel Richie are among the newest inductees to the Rock & Roll Hall of Fame. Same with Dolly Parton, though she asked to be not included.

FROM THE CREW

IT Brew

This week, we launched IT Brew specifically for IT professionals looking to stay in-the-know and have a little fun while doing it.

From cybersecurity and big data to software development and gaming, IT Brew drops all the latest industry news, trends, and insights right into your inbox twice a week.

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This editorial content is supported by Robin.

GAMES

The puzzle section

Brew Mini: We got elemental in today's Mini crossword. Play it here.

Three headlines and a lie

Three of these news headlines are real and one is faker than your friend's attempt to create another book club. Can you guess the odd one out?

  1. Freelance fashion photographer evaded Met Gala security by claiming he had Billie Eilish's heartburn medicine
  2. Chicago launches "Chicagwa" canned drinking water campaign
  3. Less than a month after I met my soulmate, I ended my 14-year marriage
  4. Canada says astronauts are no longer allowed to murder each other

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ANSWER

We made up the Met Gala one.

         

Written by Neal Freyman, Jamie Wilde, and Matty Merritt

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