| | | | | | | Presented By BlackRock | | | | Axios AM | | By Mike Allen · Sep 14, 2022 | | 🐪 Hello, Wednesday. Smart Brevity™ count: 1,457 words ... 5½ mins. Edited by Noah Bressner. 🌀 Join Axios' Andrew Freedman today at 12:30 p.m. ET for a virtual Corporate Climate Responsibility Report Card. Guests include Allbirds head of sustainability Hana Kajimura. Register here. | | | | | | 1 big thing — Two inflation rates: Bad and worse |  Data: Bureau of Labor Statistics. Chart: Simran Parwani/Axios Pockets of high inflation — particularly in the West and South — are snarling Democratic efforts to hold the Senate, Axios' Hans Nichols reports. - The Consumer Price Index climbed 8.3% over the past year, according to surprising data released yesterday. That's awfully high — and it's even worse for lots of pivotal voters.
The Phoenix metro area — home to roughly two-thirds of voters in Arizona, where Sen. Mark Kelly (D) is up against Republican Blake Masters — saw inflation rise 13% year-over-year. That's the highest local metropolitan reading in the country. - The second highest metro rate is 11.7%, in the Atlanta area — home to 6 in 10 voters represented by Sen. Raphael Warnock.
- The Miami/Fort Lauderdale area, where Sen. Marco Rubio (R) is facing a challenge from Rep. Val Demings (D), clocked in with the third-biggest local report.
White House Chief of Staff Ron Klain is closely watching AAA's updates on gas prices. - The national average is $3.70 a gallon, down from $5.02 in June.
- But prices are notably higher out West — sitting at $4.93 in Nevada, $4.05 in Arizona and $5.43 in California.
💡 Between the lines: Americans — and voters — are living in a variety of economic micro-climates, with disparities driven by differences in energy, food and hosting costs. - There's no way to sugarcoat the overall number, which diminished hope for Fed Chair Jay Powell to achieve a "soft-landing" for the economy, Axios' Neil Irwin and Courtenay Brown write.
- President Biden has largely blamed the war in Ukraine and snarled supply chains for rising prices, but has been quick to take credit for falling gas prices.
The other side: 8.1% inflation in the Philadelphia area — where Dr. Mehmet Oz and John Fetterman are fighting it out in the suburbs for the open Pennsylvania Senate seat — is just below the national average. 🔎 The intrigue: In America's biggest media centers — home to so many TV executives, reporters and campaign strategists — inflation isn't as bad. - It was an annual 6.6% in the New York area and 7.6% in L.A. in August. The D.C. area was 7.5% in July.
Share this story. |     | | | | | | 2. Worst day for stocks in 2 years |  Data: YCharts. Chart: Axios Visuals A searing inflation report spooked investors, giving stocks their steepest daily drop since the scary early COVID months, Axios' Matt Phillips writes. - The S&P 500 fell 4.3%. It was the market's worst day in an awful year — and its deepest single-day decline since it suffered a 5.9% collapse on June 11, 2020.
The S&P, a broad market index, is down 17.5% this year — on track for its worst annual showing since 2009, when it fell a horrific 38.5%. - Tech stocks got beaten up especially badly, with the tech-heavy Nasdaq composite falling 5.2%. It's now down 26% this year.
🕶️ What we're watching: Yields on U.S. government bonds — sometimes referred to as "interest rates" — which are the real source of the stock market's pain. - Treasury yields moved sharply higher after the inflation report hit, as investors bet that the Federal Reserve would have to keep raising the short-term rates it's been jacking up for most of the year to try to contain inflation.
Today's Wall Street Journal front page 🧠 The bottom line: The stock market's woes won't abate until people think interest rates can stop rising. | | | | | | | | 3. GOP vows abortion vote |  | | | Illustration: Shoshana Gordon/Axios | | | | Sen. Lindsey Graham's 15-week abortion ban, unveiled yesterday, looks like a gift to Democrats. But it syncs with nearly half of Americans' view on when the procedure should be legal, Axios' Oriana Gonzalez reports. - Graham said: "If we take back the House and the Senate, I can assure you we'll have a vote on our bill."
Why it matters: Abortion politics will ultimately pivot around which party can more successfully brand the other side as extreme. Graham (R-S.C.) introduced a federal ban on abortion after 15 weeks of pregnancy, allowing for exemptions in cases of rape or if the mother's life is in danger. - On the House side, Rep. Chris Smith (R-N.J.) has a companion bill that has drawn more than 80 co-sponsors.
- Neither has a chance of passing in a Democratic-controlled Congress.
State of play: Republicans are desperate to stop talking about whether rape victims or cancer patients should be able to get abortions. - If you squint, Graham's bill can be read as a more moderate alternative to the blanket bans currently in effect in red states across the country.
Reality check: Democrats blasted out statements condemning the legislation. Many prominent Republicans distanced themselves from it. - Brendan Buck, longtime aide to former House Speaker Paul Ryan, called Graham "unbelievably selfish," accusing him of "trying to score points with the culture war crowd at the expense of possibly blowing the Senate. Must love the minority."
Share this story. | | | | | | | | A message from BlackRock | | Invested in the future of first responders | | |  | | | | We're proud to manage the pensions of those who serve others. All across the country, we're helping Americans invest for their future. Meet Joshua, one of the hundreds of thousands of first responders whose retirement plan assets are managed by BlackRock. Learn more. | | | | | | 4. 🇷🇺 Russia's secret messaging | | The letter Z, a Russian emblem for the war, is seen yesterday on a damaged car in the freed village of Hrakove, Ukraine. Photo: Leo Correa/AP Russia secretly has sent more than $300 million to foreign political parties and candidates in more than two dozen countries since 2014, The Washington Post reports from a new U.S. intelligence review. - Why it matters: The U.S. declassified the findings "in an attempt to counter Russia's ability to sway political systems in countries in Europe, Africa and elsewhere."
Some of the countries where U.S. officials identified covert Russian political spending, per The Post: - Albania, Montenegro, Madagascar and potentially Ecuador.
Officials said a Russian ambassador gave millions of dollars in cash to a presidential candidate in an unnamed Asian country. | | | | | | | | 5. 📱 Pillow guy says FBI took phone | | Former President Trump yesterday at Trump National Golf Club in Sterling, Va. Photo: Win McNamee/Getty Images MyPillow CEO Mike Lindell says he was served a surprise yesterday at a Hardee's in Mankato, Minn. - The FBI served him with a subpoena and seized his phone, according to Lindell.
The Trump ally said the agents questioned him about Tina Peters, a Colorado county clerk accused of tampering with voting equipment. - On his podcast, Lindell said agents asked him about his relationship with Peters, who last week pleaded not guilty to criminal charges of election tampering and official misconduct.
Keep reading. | | | | | | | | 6. 🐦 Twitter whistleblower's warning | | Peiter "Mudge" Zatko arrives to testify yesterday. Photo: Brendan Smialowski/AFP via Getty Images Twitter's former security chief, Peiter "Mudge" Zatko, levied a host of accusations against the platform in front of the Senate Judiciary Committee. But his testimony didn't appear to offer much new ammunition for Elon Musk, Axios' Peter Allen Clark and Sam Sabin report. - Why it matters: When Zatko's complaint became public last month, it appeared his complaints could be used in Musk's defense.
Zatko alleged Twitter maintained lax security standards, didn't vet employee access to user data — and didn't improve practices even in the face of government fines. The other side: Twitter has said Zatko's complaint is "riddled with inconsistencies and inaccuracies." | | | | | | | | 7. Remembering Ken Starr | | On Nov. 19, 1998, Ken Starr holds up his report at the House Judiciary Committee's impeachment hearing on President Bill Clinton. Photo: Doug Mills/AP Ken Starr — the independent counsel whose investigation of President Clinton uncovered a White House sex scandal that culminated in his impeachment — died yesterday at 76. - Starr's probe of a Clinton real estate deal gone sour, known as the Whitewater controversy, spiraled into an investigation of the president's affair with Monica Lewinksy, a White House intern.
Starr was a "Rorschach test for the post-Cold War generation," the N.Y. Times' Peter Baker writes. - Starr was "a hero to his admirers for taking on whom they considered an indecent president who had despoiled the Oval Office, and a villain to his detractors, who saw him as a sex-obsessed Inspector Javert driven by partisanship."
Starr later became president of Baylor. He was demoted in 2016 amid a sexual assault scandal involving the school's football team. - He was also a member of former President Trump's defense team during his first impeachment trial.
Lewinsky tweeted: "As I'm sure many can understand, my thoughts about ken starr bring up complicated feelings. But of more importance, is that i imagine it's a painful loss for those who love him." | | | | | | | | 8. 💨 Starbucks' need for speed | | Starbucks COO John Culver shows off the "Siren System," an overhaul of equipment used to make drinks and prepare food, in Seattle yesterday. Photo: Stephen Brashear/AP Starbucks is pledging to make drinks faster and heat up food with less waste as part of a reinvention plan unveiled yesterday, Axios' Kelly Tyko and Hope King report. - Why it matters: Cold beverages have been a huge revenue driver for the coffee giant. The demand for time-consuming, customized drinks is growing in popularity among Gen Z and Millennial customers.
At an investor day yesterday, Starbucks unveiled plans to add $450 million in new equipment to speed up service. - The company designed a "Siren System" to meet the growing demand for customization of hot and cold beverages and warm foods.
- The time to make cold brew went down from 20 hours and 20 steps to fewer than four steps.
Chief marketing officer Brady Brewer said: "The number one reason for not visiting Starbucks is the line is too long." | | | | | | | | A message from BlackRock | | Invested in the future of retirees | | |  | | | | All across the country, people are working hard to build a better future. So, we are hard at work, helping them achieve financial freedom. At BlackRock, we are proud to manage the retirement plan assets of over 35 million Americans. Learn more. | | | | 📬 Invite your friends to sign up to get their daily essentials — Axios AM, PM and Finish Line. |  | | Are you a fan of this email format? It's called Smart Brevity®. Over 300 orgs use it — in a tool called Axios HQ — to drive productivity with clearer workplace communications. | | | |
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