Fortune Editors CEO Daily: The Markets' Fed Bet

Good morning.

The Federal Reserve’s policy committee begins a two-day meeting today. Markets are betting that when it’s over, the central bank will deliver another interest rate cut. I’m betting the markets are right, because the cost of disappointing them would be too high.

Less clear, however, is where the Fed goes from there. Policy makers were divided over whether to cut rates in July, and they likely will be divided when they meet today.

President Trump has no doubts about what they should do, tweeting: “Big Interest Rate Drop, Stimulus!” But it’s not at all clear presidential Twitter lobbying will help Fed Chairman Powell build the consensus he needs.

I’m still in Hong Kong this morning, but awoke to several email messages from colleagues in Toronto highlighting former Pepsi CEO Indra Nooyi’s comments at the Fortune Most Powerful Women International Summit. Like many female CEOs running large public companies, Nooyi was often hesitant to weigh in on gender issues while at the helm. But now that she’s out, she clearly feels free to speak.

“When you’re a female, colored woman, immigrant serving as a CEO of a large company and undertaking a transformation, there are tons of critics,” she said. “All the time you were in the public eye trying to answer the critics. So it was a grind all the time.”

The workplace is rife with “unconscious bias” that “attacks women’s confidence…It’s very, very important that we stop talking about unconscious bias, and start doing something about it,” she said. “The onus is not just on the men. It’s on the women.”

The “transformation” Nooyi spoke of was turning PepsiCo toward healthier products.

She said many investors resisted her efforts, telling her: “You’re not Mother Theresa.” But Nooyi argued it was important for the long-term success of the company, as well as society, to make the turn. “All CEOs should run the company for the duration of the company, not the duration of the CEO,” she said. “My success should be judged on how well my successor does, not just how well I did.”

You can read or watch Nooyi’s comments here. Other news below.

Alan Murray
alan.murray@fortune.com
@alansmurray

TOP NEWS

Amazon Antitrust

The Journal is reporting that Amazon tweaked its product-search system to potentially favor its own brands. The internally controversial change apparently promotes the visibility of the products that are the most profitable for Amazon, rather than those that are most relevant to users. If so, this will be of intense interest to antitrust regulators in the U.S. and EU, where Amazon's stewardship of its marketplace is already under scrutiny. WSJ

WeWork IPO

Are you by now begging for the tedious saga that is the WeWork IPO to just end already please? Sorry—it's being delayed until… sometime, probably by the end of the year, thanks to a lack of investor enthusiasm. Financial Times

Attack Attribution

President Trump has accused Iran of probably being behind the drone attacks on Saudi oil facilities, but said he's in no hurry to respond. Trump: "That was a very large attack and it could be met with an attack many, many times larger very easily by our country, but we are going to find out who definitively did it first." CNBC

Japan Deal

President Trump says the U.S. has reached a trade deal with Japan that will not require congressional approval. However, it's not yet clear whether this agreement will ward off Trump's threatened tariffs on Japanese cars and car parts. Reuters

What’s Driving Data?

An increasing number of companies are storing their data in the cloud, while, at the same time modernizing their data and analytics platforms. But what’s really driving this change? The cloud or a desire for transformation? Deloitte explores.

Read more

AROUND THE WATER COOLER

European Cases

Today sees the commencement of two big court cases in Europe that deserve your attention. The first is Apple's challenge to the EU antitrust ruling that forced it to pay Ireland some $15 billion in back taxes. The second is the U.K. Supreme Court's consideration of the legality of Prime Minister Boris Johnson's suspension of Parliament (if it's illegal, and if he definitely did lie to the Queen about his reasons for the move, he might be finished.) Al Jazeera

Trump Taxes

The New York Country D.A. has subpoenaed eight years' worth of President Trump's tax returns, in the context of his investigation into alleged hush money payments (including the payoff Stormy Daniels says she received). The president has repeatedly refused to make his tax returns public. CNN

Musky Slur

When Elon Musk called cave diver Vern Unsworth "pedo guy," the billionaire merely meant he was a "creepy old man," Musk has argued in court documents relating to Unsworth's defamation lawsuit against him. Musk claims that, when growing up in his native South Africa, the former term implied the latter, rather than actual pedophilia. (Note from David: I too grew up in South Africa, though I'm seven years Musk's junior, and this is news to me.) Fortune

HTC CEO

The Taiwanese phone maker HTC has a new CEO: Yves Maitre, a former executive vice president at the French telecoms giant Orange. Maitre replaces Cher Wang, who will retain HTC's board chair. Engadget

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.