Daily Scoop 22-5-4

👋 Your Wednesday Scoops - KFC China problems & Starbucks wages war

Today's Scoop:Reassured

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Big Picture

  1. Policymakers are confident in the strength of the economy.

  2. Interest rates will keep going up.

  3. Fewer jobs were created last month than expected.

The Market: 

⬆️

+3.0%

S&P 500: 4,300.17

1Mo:

-5% 

| 1Yr:

+3%

| 5Yr: 

+79%

Markets surged today as the Federal Reserve calmed investor concerns.

Policymakers will continue rolling back stimulus measures at the pace everyone expected.

The Fed announced it would

raise baseline interest rates

by 0.5% today and start slowing economic activity by reducing the money it pumped into the system. They see

very low unemployment, solid consumer spending, and substantial business investment.

The move away from emergency stimulus measures is necessary to cool business activity and stop prices from rising so quickly.

Inflation is at a 40-year high. 

Payroll service company ADP reported

fewer jobs created in the private sector last month

. About 247,000 more people found jobs, most prominently in the services sectors like leisure and hospitality. We'll get the official jobs report from the Labor Department on Friday.

Company Scoops ❤🌎💰

(Click to dig in & vote your reaction, see how others feel)

Starbucks

-

Airbnb's

Uber's

Yum!

AMD's

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🤓 Inside Scoop...

The

Federal Reserve

, aka the

Central Bank

, aka The Fed, is in charge of our whole money system. When the economy is struggling, the Fed

lowers baseline interest rates

to make it cheaper for consumers and businesses to borrow and spend. The Fed also

pumps more money

into the system by buying bonds with new dollars that it essentially speaks into existence. The additional cash keeps the pipes flowing as the borrowing and spending heat up, stimulating economic activity. Once the economy's strong enough to stand on its own, the Fed starts to

raise interest rates

and

pull back some of that money

to ensure the economy doesn't overheat.

Inflation

is the Fed's heat gauge. So everyone's watching whether the Fed can dial back the stimulus delicately enough to keep growth alive without letting inflation worsen.

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