Sponsored by

Economy

Powell laid out his economic balancing act

Powell defended the Fed’s “higher-for-longer” policy stance during his congressional meeting. Federal Reserve chair Jerome Powell said in his biannual testimony to lawmakers on Tuesday that he needs “more good data” that clearly shows inflation is moving toward the Fed’s 2% target.

While recent data could suggest "modest further progress" on costs, Powell isn't yet convinced. According to CME Group, investors are giving a roughly 72% chance that the Fed will cut interest rates by September.

The Fed is in a bind

Though the head of the Fed didn’t directly address when rate cuts may happen, Powell did allude to what the central bank needs in order to make that decision:

• Powell mentioned lowering inflation and a cooling labor market is a step in the right direction, but continued to say that the rise in prices needs to decrease before they can consider rate cuts.

  • Powell told Congress the labor market has returned to its pre-pandemic state, calling it "strong, but not overheated."

• He also went on to say that “elevated inflation is not the only risk we face," referencing the catch-22 the Fed finds themselves in.

What catch-22? Powell explained that the Fed faces a dilemma: Keep rates high for too long and risk hurting the economy, or, cut rates too quickly and reverse the progress on inflation.

Despite explaining the conundrum the central bank faces, Powell continued to be grilled by senators on when interest rates would be cut. He then explicitly stated he was not going to send any "signals about the timing of any future actions."

Powell’s political power

Since the presidential election is coming up this fall, Fed decisions will naturally carry more political weight that they would otherwise.

Senator Elizabeth Warren (D-Mass.) recently accused Powell of giving bank executives too much influence. However, Powell maintained the Fed doesn’t take politics into account when setting policy.

All in all: For the past year, the Fed has maintained interest rates at a two-decade high. Powell stated in his opening remarks that before lowering rates, the central bank still needs to see more economic data confirming lower inflation, so expect to sit tight with record high rates until more data rolls in.

Business

Bowl-based food chains are dominating

If you haven’t noticed everyone’s Chipotle/Cava/Sweetgreen bowl they’re eating on their lunch break, then I have news for you. Despite high costs and ever-rising food inflation, consumers can’t get enough of their fast casual bowl-based food chains.

The number of fast-casual restaurants in the US grew by 10% between January 2020 and February 2024, surpassing the growth of fast food by 4.4%, per Bloomberg.

Why not find cheaper options?

According to Bloomberg, the average cost of a fast food meal has risen roughly 50% in the last half-decade and eating out is about 30% pricier than it was pre-pandemic, per Labor Department data.

The bowl-centric chains have capitalized on high prices and found the ideal balance between what customers are willing to pay and the fresh (and nutritious) options they desire.

• While most people think a salad chain would be too expensive compared to a cheap fast food option like McDonalds, a salad from Sweetgreen (or bowl from Chipotle/Cava) can be less than $3 more than a Big Mac meal in some areas, per Circana.

Looking at the market: Wendy's, McDonald's, and Restaurant Brands International (which owns BK, Popeyes, and FireHouse Subs) are respectively down −16%, −17%, and −10.65%. On the other hand, Chipotle is +40%, Cava is +132%, and Sweetgreen is +149% (but not profitable).

Fun fact: Analysts at Wells Fargo purchased 75 identical bowls from eight Chipotle locations in NYC and reported that sizes “varied widely,” with the heaviest being 27 ounces, and the lightest being 14 ounces.

Amazon is stepping into luxury

Amazon has put its foot in the door on a luxury deal in a bid to step into the luxury market. The owner of Saks Fifth Avenue, a luxury department chain, reached a deal to buy rival luxury store Neiman Marcus for $2.65 billion. However, the new high-end retail conglomerate has an unorthodox investor: Amazon.

Here’s the deal

Once the deal reaches a close, the four retail stores will combine into one, with Amazon and Salesforce taking minority stakes. While each store will continue to operate independently under their own names, they will all fall under the new company, named Saks Global.

There is one caveat: According to Bloomberg, the new deal may attract the eyes of increasingly scrutinous eyes of antitrust regulators. The Federal Trade Commision has been keen on going after big tech, and more recently sued to stop a merger between the parent companies of Michael Kors and Coach.

Why would Amazon buy into high-end luxury?

While Amazon doesn’t have much experience in selling cashmere sweaters and wool suits, its data and logistics capabilities far surpass that of Neiman Marcus. Two areas that the company desperately needs improvement on as shopping increasingly moves digital.

• Marc Metrick, chief executive officer of Saks Fifth Avenue’s online operations, said Amazons involvement could help “future proof” the brand with the help of its tech.

• Neiman Marcus needs the help as the company filed for bankruptcy in 2020.

• Sales of luxury goods also fell 8% last year, according to Bain & Co.

The deal is among the tech giant's most significant investments in physical retail since the company's acquisition of Whole Foods in 2017, and should pave the way to a solid foundation in the luxury industry.

High-end rewards: The conjoined Saks-Neiman subsidiary could amass over $10 billion in sales, a source told the WSJ.

Keep up with AI

How do you keep up with the insane pace of AI? Join The Rundown — the world’s largest AI newsletter that keeps you up-to-date with everything happening in AI with just a 5-minute read per day.

Sign up with one click.

Grab Bag

Need a cheap babysitter? Send your kids to Chick-fil-A camp

This is it. We’ve found the pinnacle of American parenting. A Chick-fil-A store in Hammond, Louisiana that offered kids the chance to “work” at the chain in its exclusive “summer camp” is raising eyebrows for claims of free labor.

For $35 each, children aged 5-12 are able to attend the camp and learn the ropes of Chick-fil-A’s sandwich business. But there is a fair bit of controversy.

Send em’ to work

Critics have argued that the camp is simply a way for the company to use and abuse the labor of children, while also enticing a new generation of eaters.

A representative of the company claimed staff are the only ones actually making food, and that the children do not perform any of the tasks that hired employees do.

However, some have still taken to social media with claims of child labor, like some on the West Hammond location’s Facebook post.

What about the camp itself?

For the $35 fee, kids will attend a session for three hours where counselors teach them customer service skills, give them a kitchen tour, meet the owner, and play games. They also get a chance to meet the Chick-fil-A cow mascot.

• In addition, those who sign up get a free t-shirt, VIP kids meal, and a behind-the-scenes look at how the food is made.

July’s initial three session program at the Hammond location was so popular they had to expand it to six. I mean, it is much cheaper than daycare.

Believe it or not, this has been going on for awhile: An owner in Houston has run the same program the past six years, which has seen “overwhelming interest” and sold out annually.

Tasmania is offering weird jobs… for no money

You’ve got to get tourists to your country somehow... Tasmania is now offering 10 jobs (which are unpaid) to try and combat diminishing tourism, a few of which you’ve probably never heard of.

The Tasmania tourism agency is covering the cost of airfare, accommodation, and meals as part of this bizarre strategy to draw tourists in from June to August (which is winter in the Southern Hemisphere).

Although, wannabe odd-jobbers need to finish one day of experiential work to qualify.

Want to hear about the jobs?

Well I’d hope so, because you’re still reading. Even if you’re just looking to be less mainstream and forgo your trip to Australia in favor of its island state, there’s a few things to do there that would stand out on your LinkedIn:

• Sauna Stroker: Power your own personal sauna on a cliffside resort and relax while you embolden the flame of your firebath.

• Wombat Walker: Reserved for animal lovers. Maintain the physical and mental fitness of wombats by leading them around in their morning routines.

• Truffle Snuffler: Spend a day in the boots of a Tasmanian truffle hunter. In an immersive two-night stay, train your dog and search for black winter truffles with a rewarding meal waiting for you at the end.

• Star Seeker: Have a dinner with some of the nations astronomy savants and assist them with a range of a nocturnal activities like astro-imaging and telescope fiddling.

• Puffer Nut: Join a railway crew and help perform checks on a train that takes you through the Tasmanian wilderness.

Now if that doesn’t sound pretty sick I’m not sure what does. Tasmania has seen less tourists as of late, with only 1.25 million travellers in 2023.

However, there’s a problem: And I really hate to say this, but you need to be an Australian citizen to get the jobs. On top of that, you have to be a resident for four years before even applying for citizenship.

On the bright side, 90% of those who turn applications in are accepted within 10 months, so if you’re quick about it you can be a wombat walker by the end of the next election cycle.

Fast Facts

Concluding Craps: Las Vegas’ iconic Mirage casino will close next week after 35 years, but before it does, it’s legally required to give away $1.6 million in unclaimed prizes.

Comment Creator: Spotify will start letting listeners leave comments on podcasts. Creators can select certain comments they want to appear, limit comments they don’t, or opt out entirely.

Deep, Dark, Due Diligence: Later this month, Google will now look through the dark web for you, generating “Dark Web reports” that’ll flag if your personal data has been leaked online.

Plane Production: Boeing delivered 44 commercial aircraft last month, the most since its 737 Max debacle in January.

Check Please: Observe what it’s like to see people checking 1 million boxes at once.