JPowell might not be decked in gorpcore, but this homey’s ready to go on a HIKE.
We’re talking about rate hikes, something that the Fed hasn’t done in… quite some time. The Sparknotes version of today’s Fed meeting: we’re at “maximum employment”, inflation’s getting worse, and …. AND … we may see “more than three rate hikes” in 2022 alone.
This, as we’re in the midst of a 36-year low in corporate bankruptcy filings, and just a few basis points away from matching the pre-pandemic lows in unemployment. If you don’t own crypto or tech stocks, things are kinda awesome? Right now?
Because unemployment is so low, and businesses are so well-capitalized, we’re experiencing wage inflation, particularly in the tech sector, on which eCommerce depends. If you operate a Shopify store you’ve likely felt the effects recently; if you operate a Magento or Salesforce store, RIP your dev budgets.
Here’s what’s about to happen
- A rate hike (or five, give or take a few) would swing speculative investments back into more traditional and stable stores of value. Precious metals, 10-year T-notes, bonds, and beanie babies.
- This will cause a liquidity crunch, and slow down the disbursement of venture funds, private equity, and family offices, which have been investing in eCom SaaS, web3, and DTC CPG for the past few years.
- The lack of access to capital will cause many (many) startups to manage burn rate. Some will raise down rounds, some will fold, and many (many) developers will suddenly flood the market.
- This influx of labor will cause a DOWNWARD pressure on tech wages, meaning tech talent will be available and for much cheaper than they have been for the past 36 months.
- Inflation slows, you stop buying NFTs, devs settle for a measly 3% 401k match with no RSUs and no options, and we all win.
This will take place in the next 6-9 months (nice). So just hold on, relief for those with durable businesses in search of tech talent is coming. Now, this doesn’t sound so bad after all, does it?
Wanna go on a hike? Text Jpowell and tell us to meet up — I’m looking for an excuse to wear this Arc’teryx pullover that my friends at Refersion got me, anyways.
Death and Rebirth of Neutrality / The Thin Blue Packing Tape. Drawing on a theme from last year's Vision report, neutrality and impartiality are somewhat lost terms these days. Taking the “we’re an obviously conservative organization” route to advertising, these movers have been featured on Fox News and also helped Donald Trump Jr. move a piano. In a not-too-distant dystopic future, all of your home decor, bedding, and moving needs will be provided by ideologically-aligned brands. Wonderful.
Convenience >>. Amazon Go is headed to suburbia with convenience stores that are reduced in size from their big city counterparts. These stores will also feature their “Just Walk Out” technology, and is just another move in Amazon expanding their brick and mortar operations.
More Sights and Sounds. Neil Young has reportedly written a letter to Spotify stating that he wants all his music taken off their platform. Why? Joe Rogan. Up to 20 Nike Execs have exited the company in the last 3 months. Yikes. Our good friend Kiri Masters has released new research called The Amazon Maturity Matrix.
Chapter 11. Indie beauty company, BH Cosmetics filed for Chapter 11 protection last week, despite last year’s partnerships with Iggy Azalea and Doja Cat. The brand blamed pandemic-induced beauty routine evolutions for the filing. Corporate bankruptcies are at a 36-year low, as businesses were bolstered by economic stimulus.
Hostile Takeover. Kohl’s has finally acknowledged that more than one financial firm is talking acquisition with them. Their board is still in discussions on what to do, and stated that they “[do] not intend to further comment publicly on these matters” unless they decide to move forward.
Editor’s note: Imagine the amount of Kohl’s Cash they’ll get from this purchase. Too bad you’d have to spend it all by March 30th.
Aggressive Brands and Maximalism / The Effervescent Darkness Calls. Hot off the heels of a $75M Series C fundraise, Liquid Death launches sparkling water flavors, and the copywriter didn’t have to go so hard, but they did. “Feeling a little tingly inside? That is your thirst pissing itself in fear.” According to sources, Liquid Death’s apparel and other merch drew in more than $3M in revenue in 2021, nevermind their booming canned water business.
The New Dada / Grilled Meatloaf. Sometimes the best laid plans of pre-scheduled content can still go awry. Weber grills saw this first hand on Friday when their weekly recipe email featuring “grilled meatloaf” filled subscribers’ inboxes the day after musician Meat Loaf died. The company quickly issued a very empathetic apology and condolences to the performer’s family, showing a little empathy can go a long way.
Editor’s note: I’ve not yet seen evidence of the alleged “prior email” sent that is referenced in the apology letter. Until such evidence emerges, I will choose to believe this is a clever stunt that is in bad taste, purporting to be in good taste. Kind of like meatloaf itself.
The ever watchful Google. Another lawsuit has been brought against Google, alleging the company deceptively represented users’ ability to turn off location tracking and data collection, while continuing to log location data.