Axios Closer

Picture of a golden bell on a white background.
June 16, 2021

🐪 Welcome back. Today's newsletter is 707 words ... 2½ minutes.

🔔 The dashboard: The S&P 500 closed down 0.5% — after a kneejerk Fed-related slump. Keep reading for more.

  • Biggest gainer? Solar energy firm Enphase Energy (+5%), building on recent gains.
  • Biggest decliner? Oracle (-5%) after earnings came in below Wall Street forecasts.

1 big thing: Fed moment the world was waiting for

Screenshot of CNBC
Screenshot: CNBC

The Federal Reserve just took a baby step toward peeling back the enormous support that's boosted the economy.

  • There's a shift in sentiment among officials about how soon it should begin raising interest rates and easing other pandemic-era programs, Axios' Kate Marino reports from the virtual Fed presser.

Why it matters: What the Fed does impacts how much it costs to borrow money, including for things like mortgages.

What's new: Most Fed officials now project interest rates will go up by the end of 2023 — earlier than previous timelines. It's a sign they feel more upbeat about the recovery.

Yes, but: Fed chair Jerome Powell says it's too premature to talk about raising rates.

  • "Reaching the conditions for liftoff will mainly signal if the recovery is strong and no longer requires holding rates near zero," Powell says.

What to watch: The job market could get a jolt as factors fueling the worker shortage abate in the coming months, Powell said.

  • The inflation question: The Fed says higher prices will be fleeting, though it's unclear how fleeting.
  • "The process of reopening the economy is unprecedented ... raising the possibility that inflation could turn out to be higher and more persistent than we expect," Powell said.

The bottom line: Fed policy helped the U.S. economy avoid a meltdown during the COVID-19 crisis, Kate notes.

  • But a chorus is growing for it to consider a timeline for pulling back on its support before things get overheated.

2. Charted: America's swelling housing backlog

Data: FRED; Chart: Axios Visuals

The number of homes cleared to be built — though construction hasn’t yet started — hit the highest level last month since 1999, when the government began collecting the data.

  • Applications to build fell to a seven-month low.

Why it matters: Too few homes for voracious demand has meant soaring prices. It may keep a lid on the housing boom.

  • All eyes are on builders — but the materials they need are expensive and hard to come by.

The National Association of Realtors said today the U.S. housing market is short at least 5.5 million units. The inventory shortfall has "fueled rapid price increases that outstripped income growth across the country" in the past 20 years.

  • It would take a decade to close that gap if homebuilders built at a pace that hasn't happened since 2005.

3. What's moving

🛳 A Royal Caribbean cruise is delayed after crew members tested positive for COVID-19 — the latest setback for the industry's pandemic-era restart. (CNN)

⚡️ General Motors upped its investment plans for electric and autonomous vehicles by $8 billion to $35 billion. It plans to build two battery cell manufacturing plants — in addition to two already under construction. (Axios)

4. Top CEOs ranked

Headshot of Rich Lesser, CEO of Boston Consulting Group on a blue background
Illustration: Axios Visuals. Photos: Tomohiro Ohsumi/Bloomberg via Getty Images; Abhijit Bhatlekar/Mint via Getty Images; Rice University

Glassdoor is out with its Top 100 CEOs list — with two of the most recognizable leaders in America booted from the lineup, Axios' Hope King writes.

Missing in action: For the first time since 2013, Facebook's Mark Zuckerberg did not make the list.

  • JPMorgan's Jamie Dimon is also absent after being ranked the last three years.

Why it matters: After a pandemic hiatus last year, the new rankings reflect how CEOs led their companies through the challenges.

Who’s on top: In the U.S., tech companies dominated the list again with 29 CEOs, up from 27 in 2019, followed by finance with 12 CEOs, up from six in 2019. 

Worth noting: Five women made the list this year, down from seven in 2019.

  • Lynsi Snyder of In-N-Out Burger at No. 20.
  • Abby Johnson of Fidelity Investments at No. 44.
  • Tricia Griffith of Progressive Insurance at No. 65.
  • Jane Fraser of Citigroup at No. 91. 
  • Martine Ferland of Mercer at No. 100.

5. 🥤Going viral: The power of a snub

Cristiano Ronaldo
Cristiano Ronaldo. Photo: Alex Livesey/UEFA/UEFA via Getty Images

Cristiano Ronaldo prefers water over soda. The stock market noticed.

  • The soccer star removed two Coca-Cola bottles off a table at a Euro 2020 news conference — then held up a bottle of water and said "Water!" in Portuguese.
  • Ronaldo's snub coincided with a drop in Coca-Cola's stock. (Yes, stocks move around all the time, for various reasons).

See the clip.

6. What they're saying

“These white men say, ‘We have nobody who fits this game that I specifically designed ... for people who look like me.' Well, surprise, surprise.”
— Ex-Xerox CEO Ursula Burns on the structural challenges for people of color in corporate America in an interview with CNBC.

Thanks for reading! If this newsletter was forwarded to you, sign up here.