👋 It’s already Thursday. Today we’ve got news on a new workplace law, a dispatch from a debt restructuring pro, and some surprising news on Fed chair Jerome Powell. Let's go!

Today's newsletter is 1,193 words, a 4.5-minute read.

1 big thing: Groundbreaking new law

Illustration: Shoshana Gordon/Axios

A new federal law protecting the rights of pregnant workers is poised to take effect on June 27, Emily writes.

Why it matters: The Pregnant Workers Fairness Act is a major advancement for the rights of pregnant workers — the first such breakthrough in more than four decades — and has the potential to increase women's labor force participation over the long term.

  • Context: It's taking effect almost exactly a year after the Supreme Court curtailed the rights of pregnant people with its Dobbs decision.

Details: The law, signed by President Biden at the end of 2022, requires employers with more than 15 employees to provide reasonable accommodations to pregnant workers, as well as those recovering from childbirth and those who need to pump breast milk at work.

  • For example, a pregnant warehouse worker might need light duty if a doctor has restricted the amount of weight the employee can lift. A retail worker may need extra bathroom breaks or to carry a bottle of water on the store floor; a cashier might ask to sit on a stool while working.
  • Pregnant workers typically need time off to go to the doctor — or, if they wear uniforms at work, they'll need new clothes.

The backstory: Over the years, women have filed lawsuits over issues like these — often losing to employers because the 1978 Pregnancy Discrimination Act didn't explicitly cover accommodations.

  • As a result, pregnant workers — particularly those in low-wage industries who work on their feet — were often forced out of jobs, cutting them off from earning money right before a new baby enters their lives; a time when it's harder to look for new work.
  • Others wind up sticking it out — ignoring doctor orders — and putting their health at risk.

The impact: 2.8 million women a year are pregnant on the job 70% of pregnant women in the U.S., per an analysis of census data from the National Partnership for Women and Families.

  • In other words, the new law has the potential to keep millions of women attached to the workforce, and comes as the U.S. lags behind other countries in women's labor force participation.

Worth noting: The law may also effectively be a backdoor expansion of maternity leave in the U.S.

  • That's because workers can request leave to recover from childbirth even those who don't qualify for the Family and Medical Leave Act (the federal law that guarantees unpaid family leave to certain qualifying workers).

The intrigue: The law could potentially cover the right of a pregnant worker to take time off to access an abortion or other reproductive health care, some advocates for the legislation told Axios.

  • But because the current legal landscape varies by state, that might be tricky in practice.

What they're saying: "This is really a groundbreaking moment, especially for workers in low-wage industries in physically demanding jobs in male-dominated workplaces where we have seen really egregious pregnancy discrimination," said Sarah Brafman, national policy director at A Better Balance, which led the effort to get the law passed.

Go deeper

2. Catch up quick

📈 Bank of England rate hike is bigger than expected. (AP)

💰 Overstock wins auction for certain Bed Bath & Beyond assets for $21.5 million. (CNBC)

💸 Bipartisan bill to claw back pay from failed bank execs passes Senate committee vote. (CNBC)

3. Soft landing conversion

Data: FRED; Chart: Axios Visuals
Data: FRED; Chart: Axios Visuals

Up until a few weeks ago, Dan Pombo, JPMorgan’s global head of restructuring, thought a soft landing wasn’t possible.

  • Now: He’s coming around to the idea that it may actually happen.

Why it matters: Those who work in debt restructuring and distressed investing tend to be some of the biggest skeptics of a feel-good economic narrative, the most attuned to things that could go wrong and usher in a wave of debt defaults, Axios’ Kate Marino writes.

  • After all, a default cycle is when these folks have the most opportunities to make money, by advising companies in trouble or investing in their debt at pennies on the dollar.

“A few weeks ago, I would have said, 'Yeah, we're definitely going into recession.' But I'm not sure anymore ... Consumers are not pulling back on their spending," Pombo told a group gathered recently at the Debtwire Restructuring Forum in Manhattan.

The big picture: JPMorgan's house view on high-yield bond default rates is that they'll climb to about 3.25% next year — higher than today's 2.4% level, but in the realm of the long-term historical average of 3.2%.

  • Pombo agrees with that forecast. He sees defaults and bankruptcies ticking up further as a result of higher interest rates, rather than the widespread economic pain of a recession.

Worth noting: Pombo's shift in thinking shows up in high-yield bond spreads, too.

  • Average spreads, or the amount that corporate borrowers have to pay over Treasury yields, shot up shockingly fast in the wake of Silicon Valley Bank's collapse — to levels that typically indicate recession risk.
  • But check out the chart above: Spreads have receded to their pre-banking crisis levels.

4. 🐻 Bad news for bears

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

The outlook for corporate profits is looking better, Matt writes.

Why it matters: It's another reason the bulls of the market appear to have the bears on the run.

The big picture: Since the last round of earnings started arriving in mid-April, Wall Street analysts have been marking up their expectations for the profits that S&P 500 companies are likely to generate over the next year.

  • In aggregate, analysts have upped their estimates by about 3%, to nearly $232 a share for the entire index, from just below $225 a share back when worries about an imminent recession were arguably at their worst.

Details: Analysts expect the S&P 500 to deliver another year of record earnings in 2023, with EPS rising roughly 2% to $220.53 by the end of December, according to FactSet.

The bottom line: That's not huge growth. But it seems to be solid enough to give stocks a firm foundation to climb.

5. It's true. Powell is a Grateful Dead fan.

Jerry would probably dig it, man. Photo: Ed Perlstein/Getty Images

The head of the Fed is also a deadhead, Matt writes.

Why it matters: It doesn't, really.

The backstory: Since a photo emerged earlier this month of Jerome Powell at a Virginia performance of Dead & Co. — a project of former Grateful Dead members Mickey Hart, Bob Weir, and Bill Kreutzmann, as well as guitarsmith John Mayer and others — the Fed chair's fondness for the legends of San Francisco psychedelia has been a point of mild amusement.

What he's saying: Powell made no bones about it when asked during congressional testimony on Wednesday. It's all true. He was, indeed, at the show.

  • "What can I say? It was great. I've been a Grateful Dead fan for 50 years," Powell said.

The future Fed chair attended his first Dead concert in 1973 at RFK stadium in Washington, D.C., Andy Serwer reported in Barron's, citing a source close to Powell.

  • Powell is also a guitar player, and has joined former Fed vice chair Richard Clarida — another picker — in lighting up the Fed holiday party with renditions of "God Rest You Merry Gentlemen" and the Burt Bacharach classic "What the World Needs Now is Love," according to NYT reporter Jeanna Smialek's recent book on the Fed.

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Today's Axios Markets was edited by Kate Marino and copy edited by Mickey Meece.