ECONOMY

Why the Fed’s New Inflation Strategy Matters

While Fed Chair Jerome Powell looks like he’s giving James Bond instructions for a new mission, we can assure you he is talking about a much more exciting topic: monetary policy. 

In a keynote address at the Fed’s annual policy symposium, Powell revealed a major update to the central bank’s basic framework for steering the economy through good times and bad.

The update: The Fed now wants inflation (the rise in prices) to run at a 2% average, rather than a concrete bullseye it needs to hit. That means it will be comfortable with inflation climbing above 2%, a prospect that at one point would scare the bejesus out of central bankers.

The reason behind the shift: Powell and his pals thought that historically low unemployment—like the kind we had in 2019—would push up prices and cause higher inflation, but...that never happened. Inflation consistently came in below the 2% target despite pretty much everyone having a job. 

The new change, in Powell’s words, “reflects our view that a robust job market can be sustained without causing an outbreak of inflation.”  

What it means for you 

The Fed typically hikes interest rates when it’s worried inflation might run too hot. But as we mentioned, it just kissed those worries goodbye. 

That means interest rates, which the Fed dropped to near-zero in the early days of the pandemic, could stay really low for a really long time. The Fed’s benchmark interest rate sets the standard for borrowing costs across the economy, influencing everything from mortgages to the yield on your savings account. So whenever you lock in a super low rate on your home loan or earn $1 in interest over the next year, just say “Thanks, Jerome.” 

WEATHER

Laura Slams Louisiana

Laura, one of the most powerful hurricanes ever to hit the U.S., crashed into the Louisiana coast early yesterday morning as a Category 4 storm before weakening significantly. Houses and businesses were flattened. Officials have confirmed at least six deaths. 

The industrial city of Lake Charles (pop. 80,000) was particularly pounded—police spotted a casino that had been unmoored and was floating on by. And first responders were trying to stamp out a fire that had broken out at a chemical manufacturing facility. 

The cleanup is just beginning and authorities will assess the damage in the coming days. One piece of good news? The storm surge was far lower than feared.

SOCIAL MEDIA

Name a More Iconic Trio

Kim, Khloé, and Kourtney. Eggs, cheese, and ketchup. Microsoft, TikTok, and...Walmart? 

Walmart turned Business Twitter sideways yesterday when it announced plans to Teams up with Microsoft to purchase TikTok’s U.S., Canada, Australia, and New Zealand operations. 

Catching you up: The Trump administration has forced TikTok's Chinese owners to sell the video app to a U.S. company over national security concerns. The price tag? In the $20–$30 billion range, per CNBC. 

What a big-box retailer gets from a partnership with a software company to buy a social media company:

• A boost to e-commerce. Walmart has a membership program in the works called Walmart+, which it hopes will unseat a rival that rhymes with Bamazon Brime. 
• Second, a huge new advertising market. TikTok has nearly 100 million monthly active users in the U.S. who may be in for a lot more “Save Money. Live Better.” 

Looking ahead...a decision from TikTok will reportedly arrive “in the coming days.” But it'll be without CEO Kevin Mayer, who resigned abruptly Wednesday night. 

SPONSORED BY GRAZE

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That’s right—Graze isn’t just in a great mood because of how good that grass tastes; Graze is happy because it’s successfully disrupting the $53 billion dollar landscaping industry.

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Invest in the mower of the future right now.

MEDIA

A New Dawn at Bon Appétit

Yesterday, Condé Nast announced publishing exec Dawn Davis will take over as editor-in-chief of Bon Appétit this November, where she’ll oversee the food media brand’s magazine and popular Test Kitchen video franchise.

At Simon & Schuster, Davis launched the 37 Ink imprint, which focuses on publishing books by authors from marginalized communities. She’ll be the third Black person to lead one of Condé Nast’s U.S. publications. 

She’s got grease fires to put out

Earlier this summer, as protests over the killing of George Floyd spread across the country, Bon Appétit faced its own reckoning over allegations of racism and unequal compensation for employees of color.

• Former editor-in-chief Adam Rapoport stepped down in June after a writer shared a photo of him wearing brownface in 2013. 

In the last month, seven Bon Appétit personalities stepped down from appearing in Test Kitchen videos, including several employees of color, after negotiations to address pay inequities stalled. Some of those chefs remain on the magazine’s editorial team.

Big picture: The scandal at Bon Appétit has played out very publicly, with employees using social media to pressure the company for change and call it out when it failed to do so.

TECH

Amazon’s Halo Effect

Yesterday, Amazon anointed its first major play in the wearables market with wings. The Halo wristband packs all the must-have trackers—cardio, sleep, heart rate, temperature—but two new features may be more polarizing than chewing on ice cream:

• Tone uses built-in microphones to periodically listen to a user’s voice and log their emotional state. 
• Body creates a 3D body scan using smartphone photos, then uses AI to calculate body fat percentage. After five months pounding quarantine Cheez-Its, count us out. 

Halo doesn’t include a screen (users access their stats through a smartphone app), and Amazon will keep user profiles separate from Prime accounts. It’s also breaking from the industry norm by charging a $4/month subscription.

Big picture: Until now, Amazon has mostly focused on tricking out your home with smart devices. With Halo, it’s making a play for the estimated $52 billion wearables market and complementing its other efforts around telehealth, employer healthcare, and pharmacy delivery in the $3.5 trillion healthcare sector. 

Looking ahead...it’ll be playing catch up. The Apple Watch locked in 51% of smartwatch shipment revenues in the first half of 2020.

QUIZ

Macaulay Culkin Is 40. Here's a News Quiz

It was a historic week of hurricanes, protests, and politics. See how well you absorbed all the information by taking our weekly news quiz. 

WHAT ELSE IS BREWING

• NBA players have decided to resume the playoffs after refusing to take the court in protest against racial injustice. Other sports leagues postponed games last night to draw attention to issues of racism and police brutality. 
• Broadway Federal Bank and City First Bank are merging to create the largest Black-owned bank in the country.
• Warby Parker, the e-commerce eyewear pioneer, raised $245 million at a $3 billion valuation.
• Elon Musk’s company Neuralink will give an update on its brain-machine interface this evening.

BREW'S BETS

Before the holiday shopping avalanche hits—prepare with Square. Considering 66% of shoppers plan to increase their online holiday spending this year, now’s the time to get ahead. Download their guide to holiday e-commerce today.*

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Hits of the week: Readers loved Emerging Tech Brew’s comprehensive guide to AI, a seriously addicting game, and the 10 fastest-growing athleisure brands online.

Follow Friday: Marketing Brew writer Phoebe Bain is taking over today. Follow her on Twitter and Instagram, then check out…

• On Insta: @truecolors.official takes iconic brand logos and makes them as white as their corporate leadership and boards. And the graphic design inspo on @paulfuentes_design, is *chef’s kiss.* 
• On Twitter: The Knot’s VP of Marketing @AmandaMGoetz is leading the wedding industry through a pandemic (I wonder if she follows the satirical @NYTvows), while @haydenfield is the newest writer on the Brew’s elite emerging tech squad.

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FROM THE CREW

Brew Originals: Disabilities and the Pandemic

For years, the Brew has been known for summarizing the day’s news in a fun, digestible format. But we have unique stories of our own to share. Today, we’re excited to release a Brew Original piece by writer Alex Hickey that explores how the remote work revolution has affected the employment prospects of American workers with disabilities. You’re guaranteed to learn something.

Read the piece here.

FRIDAY PUZZLE

This one should keep you occupied for a bit:

Find a number ABCDEFGHIJ such that A is the count of how many 0s are in the number, B is the number of 1s, and so on.

FRIDAY PUZZLE ANSWER

6210001000

Source: Braingle