Recapping Powell’s Turbulent Legacy & Fans Go Crazy Over Swatch Collab

0:01Marketers, tell us if this sounds familiar. You invest in something that seems incredible, like millions of views, but then don't see any revenue. Instead, invest in what looks good to your CFO. LinkedIn Ads generates the highest ROAS of all major ad networks. Spend$250 on your first campaign on LinkedIn Ads and get a$250 credit. Just go to linkedin.com slash mbd. That's linkedin.com slash mbd terms and conditions apply good morning bird daily show i'm neil freiman and i'm toby howell today jerome powell leaves the federal reserve after a turbulent eight years then honda just reported its first loss in 70 years it's friday may 15th let's ride

0:48good morning and happy friday last night the nfl dropped its full schedule for the upcoming season which has somehow ballooned into a major social media holiday. Each team tries to outdo one another with comedic videos revealing their 2026 slates, tapping celebrities for cameos and borrowing styles from other types of media. The Chargers, often regarded as the creme de la creme of scheduled release videos, once again impressed by using the Halo video game series as inspiration. The Raiders parodied stepbrothers. The Panthers set off controlled explosions to unveil their opponents. and the Jets lean into ASMR painting to reveal all the teams they'll lose to this season.

1:24Of course, the NFL has turned a schedule release into a must-watch event. It's not just the schedule release. It's also the schedule itself. It's just slowly spreading its tentacles across the rest of the week. So Lev Akabas on X noted that the NFL has been moving from Sundays into the rest of the week. The percentage of NFL games that occur on non-Sundays has risen from less than 7 % in the 1960s to nearly 19 % so far in the 2020s. So if you feel like your partner is somehow always watching a game in which their fantasy football team is underperforming, you're not wrong. NFL schedule creep is real.

2:02And now a word from our sponsor, AT &T Business. Neil, check it out. I'm totally high tech. I built a Toby AI for my business. What does it do? So far, eat up a lot of my bandwidth. Well, maybe you should check out AT &T Business, A solid, reliable connection means you can take advantage of tools that can handle repetitive tasks and free up time for more strategic activities. Explore connectivity solutions that can transform your operations at att.com slash smallbusiness. A new era dons at the Federal Reserve. Today, Kevin Warsh is officially taking over as chairman of the Central Bank, becoming the most powerful economic policymaker in the world.

2:42With Warsh stepping into the role, Jerome Powell's watch has ended after eight years. Eight years that probably felt like a lifetime. Powell's run as Fed chair will go down as one of the most consequential in history. He led the bank's response to historic economic shocks, COVID, soaring inflation, Russia's war in Ukraine, the current crisis in the Middle East. At the same time he was dealing with those issues, he was forced to defend the Fed's independence after he came under withering criticism from President Trump, the same man who nominated Powell back in 2017 and clearly regretted that. Powell's tenure won him legions of fans as well as a number of detractors.

3:16He was praised for the Fed's creative response to the pandemic, unleashing a bazooka of stimulus to keep the economy from collapsing. And many others admired his backbone standing up to Trump. But Powell also had his share of stumbles, most notably allowing inflation to skyrocket to a 40-year high in 2022, and it remains above target four years later. But with Powell, it's not goodbye, it's see you later. citing Trump's pressure on the central bank. He'll continue working in his role as Fed governor, the first former Fed chair to not dip out completely in more than 75 years. Kevin Warsh, you've got some big shoes to fill.

3:49You really do. It feels like my life as a business news consumer corresponded exactly when Powell came into the Fed chair. So it's gonna be weird not referencing him when we're talking about all these different financial comings and goings that happen in the economy. I did just take a trip down memory lane and probably the thing that most people are going to remember Powell for is just how he handled the COVID pandemic and a lot of praise that he got for stabilizing markets. Powell even called him or sorry, Trump even called Powell and jokingly called him my most improved player for, you know, handling pandemic so well.

4:27And then what happened after that was a little bit of a rougher patch because that transitory inflation line is another thing that will just always be associated with Powell because the Fed was just a little bit slow to react to that inflation going up. They had been a little bit nervous after the recovery in 2008. So that is one notch in his calm, one notch against him. And then they did pull off a soft landing. That was the other thing that you and I said a lot of times on this podcast is, will the Fed be able to bring back down inflation, keep the job market alive, do the vaunted soft landing where you control both those things at the same time?

5:05And he kind of delivered it, which is another check in his column. So for every detractor, for every person who praises Powell, you can find a data point corresponding to whatever camp you fall in. Yeah, I remember at Jackson Hole, which is the central bank conference in August 2022, Powell gave an eight minute speech that sent shockwaves across the global economy because he said that bringing inflation down from nine percent. And again, he said this this this inflation would be, quote, transitory, which is a quote that will haunt him for a long time, because he thought when supply chains fix themselves after covid, that inflation would come down.

5:40but it turned out to be a much stickier issue. So he warned of pain for the economy as the Fed jacked up interest rates at the fastest pace in 40 years to bring down inflation from 9%. Pretty much every economist said there would be 100 % chance of a recession as the Fed jacked up interest rates to bring inflation down, but that didn't happen. It didn't happen. And the other thing that did happen, though, is that when you jack up interest rates that much, things got a little wonky in the banking industry. And you can't just overlook the banking, mini banking crisis that happened where Silicon Valley Bank collapsed because these rapid rate hikes kind of blew up all these low yield bonds that were still on banks balance sheets from a previous era of the Fed.

6:21So it was such a consequential term that like you could just go down the list. It feels like every single month he was dealing with something else, but maybe his defining legacy, I've already said he's been defined by multiple things is Fed independence because he very strongly and very robustly stood up against President Trump. Remember, he released a video decrying this investigation into him. How many times do you see Fed, you know, governors and Fed chairs go direct to the American public and start to stand up for the institution that they represent? That is not something that happens normally.

6:55But I think that's what a lot of people will associate Powell with going forward. It's just that he took this stand and stood up for the thing that is most important to the Fed. Yeah, that video, I mean, was just absolutely shocking where he just stood up in that room, a couple minute video saying that he's under investigation. It's directly because he wasn't lowering interest rates like President Trump wanted. Just a huge historic moment in the Federal Reserve's history. Let's talk Kevin Warsh. So Kevin Warsh is coming in today. He was confirmed earlier this week, and maybe this is a sign of how the Fed has been politicized.

7:30The vote to confirm Kevin Warsh was 54 to 45. That was the slimmest confirmation margin ever. Just one Democrat, John Fetterman, voted for Warsh. There's concern that he will be a lot more acquiescent to President Trump's demands to lower interest rates than Jerome Powell was. Meanwhile, he comes into a very sticky situation. Jerome Powell didn't leave him with the most, you know, the most serene economy because we are seeing inflation rise again. Inflation is moving higher at its fastest pace in three years, 3.8 percent. We got that consumer price index report earlier this week. And then just a few days ago, we got the producer price index as well, which set off more inflation alarm bells.

8:10This is wholesale prices. This is what companies pay to bring in goods to make other goods. And the producer price index for April rose 6 percent from a year ago, which blew away all expectations. J-Pow era is over. The washing machine era begins, and I couldn't be more excited. Moving on, it's a big week for horologists. One of the most exclusive watchmakers has teamed up with one of the most prolific watchmakers on a collab that had people camping out for five days in advance. Audemars Piguet, aka AP, worked with the budget watchmaker's swatch on an eight-piece collection dubbed Royal Pop. The royal part references the iconic Royal Oak from AP, which can run you north of$50 ,000, while the pop refers to the bold colored budget swatch line from the 80s.

8:56Spoonce them together and you get the Royal Pop that will go on sale for over$400 this Saturday. Even if you're not a watch person, you likely got sucked into the hype cycle around this collab. AI generated versions flooded Instagram as people speculated what the high-low team up would look like, and the lines to buy are outrageous. CNN spoke to some people who had been camped out since Tuesday for their chance to buy one this weekend. However, one group that wasn't a fan was Swatch shareholders who sent the stock down about 7 % on Wednesday after it was revealed that the collaboration with AP was a pocket watch.

9:31One analyst called it quite odd and questioned whether the concept will have legs beyond the initial hype. Neil, I don't know the difference between a Lapine and a Savonet, but I think I might be the target audience, a younger watch curious person is exactly who AP is trying to attract with this team up. Yeah. First of all, this was completely unexpected and surprising. One, one watch analyst wrote, it was so spectacularly unexpected that less than a week ago, absolutely no one, myself included could have possibly believed such a collab would ever happen. It's like Erewhon teaming up doing a pop-up store with Walmart.

10:05But the goal here is to drive interest from people like you in mechanical watches because mechanical watches are seeing just less demand. They're getting eaten into by smart watches and other things. So these two companies are trying to pull off the completely unexpected to get younger people, to get people back interested in mechanical watches. And the one way you do that is with collabs like these that has people waiting outside of stores for five days, but also just bring down the price point from where someone can maybe own an AP watch that they can never afford, but you can do it at$400 now.

10:41Yeah, people in the pro collab camp say that this is very fun. It doesn't do damage to the core brand of AP, and it also just makes Horology feel a little less stiff because it's a fun little collab. It comes with a lanyard. You can hang on your bag or something like that. The anti-collab camp says that this cheapens the Royal Oak. This is an iconic silhouette. It's way too gimmicky. It's not a real AP. Those are kind of the two thoughts that have diverged in the woods. I think it's going to become more like a LeBubu type thing. That's what it feels like. They have these charms and these accessories, and I do think that you'll start to see them on red carpets or on people's athletes as they walk out to games and stuff like that.

11:27So I really do think that it's about expanding watch culture. Again, I am talking about it as someone who doesn't really understand watches because it is just this fascinating thing. Whenever you have some very, very luxury brand go down the pecking order, it's gonna get people talking. Yeah, I mean, this definitely broke containment from the watch industry into the wider public. And so that's why people outside of Horology, which you just dropped that word without - I know. Without kind of any context. It's a good word, are talking about it. And the demand seems there, at least in the buildup to the release, which is tomorrow.

12:02Moving on, welcome to Stock of the Week, Dog of the Week, Our Friday segment where we pick one stock that floated like a butterfly and another that stung like a bee. I won the pre-show game of Mario Kart, so I get to go first. And my stock of the week is the tobacco industry because their main nemesis just got vanquished. On Tuesday, FDA Commissioner Marty McCary resigned after a bumpy 13 months overseeing America's drug regulation, food safety, cosmetics and medical devices. McCary's tenure was marked by all kinds of controversy, but the final straw was his opposition to flavored vapes, which put him at odds with his boss, President Trump.

12:36And that's why big tobacco is glad to see him gone. Tobacco companies like Marlboro Maker, Altria, and Reynolds have been in Trump's ear for months, urging him to make good on his campaign promise to save vaping by approving fruit-flavored e-cigarettes. But they grew frustrated by McCary slow-walking the issue, presumably because McCary was against it, and decided to take their grievances directly to the president. Early in May, tobacco executives and lobbyists complained to Trump about McCary, according to the New York Times. Trump was sympathetic to their concerns and interrupted that conversation to call up McCary right that second.

13:08He didn't pick up. Then, very angry at this point, Trump called up the health higher-ups, RFK Jr. and Dr. Oz, to make life easier for the tobacco industry. And the gears were set in motion. Last Friday, the FDA paved the way for U.S. tobacco companies to start selling flavored vapes while a defeated McCary began packing up his things. There couldn't have been a better outcome for this industry. I guess the lesson is always answer your phone because you never know when your boss might be calling. Dr. Selene Gounder went through and tracked how the tobacco industry donated to the Trump campaign in the lead up to his second presidency on her sub-dac because they invested very heavily in him.

13:45RAA Services, which is part of British American Tobacco, gave$10 million to the Make America Great Again Super PAC. Altria gave$1 million to the same PAC and$1 million to its inauguration fund. Both of them chipped in for the president's White House ballroom renovation as well. So her contention was basically just follow the money here. If you want to see how the tobacco industry has suddenly regained a foothold and is looking on much more stable footing, It's because they donate a lot of money to the Trump presidency campaign. And, you know, when I first read this news, I was like, wait, tobacco industry is probably against vaping because they sell cigarettes and they think that vaping is taking away their market.

14:24Well, all these tobacco companies have seen the writing on the wall for years and decades now. They're moving away from actual cigarettes and towards e-cigarettes and nicotine pouches, which is where the real growth is in the industry. I just went to Altria's website this morning. Now, this is the company that makes Marlboro. Their big slogan that's the headline of their entire website is moving beyond smoking. So that's why these companies are all in on vaping and nicotine pouches. And the market there is huge. It's about 30 million people in the United States, which is basically the same with the number of cigarette smokers.

14:57We've seen Zinn be huge for Philip Morris. And that's why these companies are trying to push for flavored e-cigarettes because they think that is a way forward for this entire industry. And you mentioned that there's 30 million vape users. 60 % of that market is going towards illegal flavored Chinese vapes that just flood the country. And so the argument from the industry is, listen, kids are smoking vapes regardless because they are getting them at gas stations or coming in from China. If you want to regulate this industry, let us play in the ballpark. Then we actually have some oversight. Do not let it be dominated by these illegal Chinese vapes.

15:36that's the argument that they're saying. Obviously, it benefits them as well, but specifically, they want to try to recapture what the future of nicotine looks like, and it looks like it's going to be vapes and pouches, so they want to play in that ballpark. All right, we're going to take a quick break and come back with our Dog the Week right after this. Toby, what if I told you you had to pay me$1 ,000 right now? I'd be in deep trouble. Well, you would be in the same boat as a lot of employees in the U.S., and that can lead to decreased productivity and distractions. Thankfully, Aflac can help.

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17:30The Morning Brew Team:June 30th, terms at aka.ms slash college pc. My dog of the week is Honda, who just lost money for the first time in 70 years. Honda reported an operating loss of$2.7 billion for the fiscal year ending in March. That's the first loss it's had on its books since becoming a publicly traded company back in 1957. The source of their woes is the aggressive pivot to EVs. It invested billions of dollars in battery plants and partnerships to try and chase down rivals like Tesla and BYD. But like a Tinder profile with only fish pics, demand never quite materialized. It had plans to go fully EV and hydrogen powered by 2040, but buyers remain skeptical, forcing Honda to cancel future EV models, which means billions went into designing cars that never saw the road.

18:19The lofty goals are now officially shelved. Of course, the policy environment did them no favors. Trump eliminated the$7 ,500 tax credit back in September and imposed tariffs on imported cars, a double whammy that led to$10 billion in restructuring charges and write downs. It's now U-turning into more profitable directions and has shifted its attention towards releasing 15 new hybrid models by 2030. Neil, back when Honda announced the bold prediction of ditching combustion engines, they were praised for it. Now the rug has been pulled out from underneath them and it's making history in all the wrong ways.

18:53Yeah, Honda was building for Biden. They were building for an EV future where electric vehicles made up more and more and more sales of the United States, which is its largest largest market. According to Honda executives, their internal targets, they expected EVs to account for about 15 percent of new vehicle sales in the United States. But today that figure is around six percent and EV sales actually decreased last year. So this is an industry that has gone into reverse, an EV industry, and Honda was building for a future that just never materialized. I'm just thinking about all the times that people have made decks for their managers that kind of got scrapped.

19:31Well, imagine building plants and putting all these billions of dollars in time and money into these cars that just never materialized. But Honda is not alone. And honestly, when you compare it to the rest of the auto industry, they're not looking that bad because Ford recently took a$17.4 billion EV related charge in 2025. Stellantis took a$29 billion right down as well. General Motors, a$7.2 billion charge. So if you look at the$10 billion hit that Honda took, it actually is kind of middle of the road. Also, one thing Honda has that other car companies do not is a very healthy motorcycle business.

20:12Their motorcycle business has captured almost a third of the global market and it accounted for roughly half of the company's profits because sales are still going there. They grew 11 % last year. So they are actually expanding their electric two-wheel offerings, even though people hate their electric four-wheel offerings. Yeah, I mean, Honda has been known for decades for just making sick engines. And so when they announced that they were moving away from engines and towards batteries in 2021, everyone was like, wow, this is not really your bread and butter. So that was a little bit of a head fake when they announced this.

20:44And it was a bet that went extremely wrong. And you can't ignore what's happening in China, which is what every non-Chinese carmaker is dealing with, which is cutthroat competition, price wars, just all of these companies moving into that particular market. It is losing a lot of ground in China, like so many other automakers. Honda sales have been cut in more than half in recent years in China. And so this is you hear this from Ford, GM, Tesla. Every single company is saying it's just impossible to compete in China. And we're seeing that on Honda's books right now. It was really funny. I would Google Honda problems to research for this story.

21:18And all I got was Formula One news because they make engines for a lot of Formula One cars. So apparently Aston Martin's having some safety issues with their Honda engines there as well. So good luck in Formula One and good luck in EVs going forward. Let's sprint to the finish with some final headlines. Cerebris went public yesterday and one of the hottest debutantes of the AI era did not disappoint. Shares jumped 100 % at one point after opening on the NASDAQ, powering it to a valuation that briefly eclipsed$100 billion. Good for the biggest IPO for a U.S. tech company since Uber went public back in 2019.

21:55Cerebris has built its business around making really big chips, home to 4 trillion transistors designed for AI inference and counts OpenAI and Amazon as major customers. The debut also shows the Joey Chestnut-level appetite for anything tied to artificial intelligence infrastructure, especially companies that are positioning themselves as challengers to NVIDIA in the race to power AI models. Neil, a nice appetizer for the main course of AI IPOs potentially coming later this year, like OpenAI, Anthropic, and SpaceX. Yeah, an incredible debut. The one red flag for Cerebris is customer concentration.

22:31This was not the first time that Cerebris tried to go public. It tried to do it back in 2024, but you have to fill out paperwork to show your customer base. And when they did that, it was revealed that in 2024, 85 % of their entire company's revenue came from just one customer, which is G42. It's a Microsoft-backed company in the UAE. Now, it's been working to diversify its customer base. Now, G42 accounts for just 24 % of its revenue last year. But the other 76 % of that is still made up of just a few other companies like OpenAI. So when we're talking about these circular deals in the AI industry and just companies like CoreWeave or Cerebris relying on just a few companies, just a few hyperscalers for their particular revenue, then this is something that concerns investors.

23:20It didn't concern them on day one. It's certainly a company, though, that has interest in the AI space because back in December, NVIDIA paid$20 billion for a startup called Grok, not Elon Musk's Grok. It's G-R-O-Q. Their chips very closely resemble Cerebris. And again, I said they're big chips. This is kind of a area where the industry is curious about. It's like, what if we just made everything a lot bigger? Does that increase inference speeds? Does it make things more efficient so a hundred billion dollars versus 20 billion dollars clearly there's a lot of money and a lot of interest in this big old chip chip game and by chips we mean wafer that's about the size of a uh picture book yeah so that's not that big i mean that's what's considered a big chip in this industry four trillion transistors though i can't even that's a lot that boggles the mind moving on instagram famously copied snapchat stories back in the day now it's coming for the rest of the app's functionality too.

24:17Meta unveiled Instance this week, which lets you send unedited disappearing photos to your friends. As the name would suggest, this promotes ephemeral photo sharing, giving users a chance to break from the polished IG aesthetic to share more raw moments. Close Friends has also been a big success on Instagram and Instance lets you lean into the shrinking of your social graph from everyone who's ever followed you to just the people you want to see your stuff. Neil, I'll also read what Wired had to say in their article, and I quote, it's probably where your horny friends will post spicy pics, so there's that tip.

24:51Couldn't be me. Yeah, one thing that people may want to know is that when you go to Instance and you tap the shutter button, that photo is automatically captured and sent to your friends. So there's no lag time between like, okay, I wanna tap this button, and then I will pose for a photo. It literally instantly takes it and then sends it to your friends list. So just be aware that if you want to send an instant, horny or otherwise, you should just be careful. And that has led a lot of people to look up, hey, how do I delete this or how do I remove this from Instagram? And you can do that by just going to settings and under your settings and content preferences tabs, you can just toggle it off.