Brew Markets Podcast Summary

Episode: Fed Rate Reaction & Will A Bespoke Shakeup Help Etsy?
Date: October 29, 2025
Host: Ann Berry

Episode Overview

In this episode, Ann Berry breaks down the day’s major market stories with sharp analysis and actionable insights. The main focus is on the Federal Reserve’s latest rate cut—whether it’s the last one of the year—and what it signals about future monetary policy. The hosts also dive into notable corporate earnings from Caterpillar, Boeing, and Etsy, and answer a listener’s question about the surge in corporate share buybacks.

Key Discussion Points & Insights

1. Federal Reserve Rate Cut: More Uncertainty Ahead

(00:02—03:48)

• The Fed delivered a quarter-point rate cut as expected, but there’s growing uncertainty about further cuts this year.

• Three key nuggets from the Fed’s decision:

  1. Division within the FOMC:
     • More dissenters than in September; Stephen Mirren wanted a larger cut, Jeffrey Schmidt wanted no cut—a clear sign “it’s possible we won’t get that third rate cut.”
     • Quote:
       "There were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it."
       —Ann Berry quoting Fed Chair Jerome Powell (02:01)
  2. End of Quantitative Tightening:
     • Fed to stop selling securities holdings on December 1st, a move easing pressure for further rate cuts.
  3. Limited Economic Data:
     • Ongoing government shutdown means less data (non-farm payrolls, retail sales) to support further cuts. Recent inflation data (CPI) shows prices ticking up, also against further easing.

• Market reaction:

  • Negative; indices ticking down on suggestion that no third cut is forthcoming.

2. Earnings Spotlight: Caterpillar, Boeing, Etsy

(03:48—14:29)

Caterpillar: An Unexpected AI Play

(04:03—07:07)

• Caterpillar’s Q3 earnings:
  • Market cap: $275 billion; stock up 14% on earnings day, up 65% YTD.
  • Adjusted EPS beat by $0.43; revenue up 10% YoY to $17.5B.
• Sectors:
  • Leading in construction, mining equipment, gas engines, turbines, and locomotives.
• AI Angle:
  • CEO Joe Creed:
    "We expect strong growth in full year sales for power generation compared to last year. Demand remains robust, driven by data center growth related to cloud computing and, and generative AI." (05:13)
  • Ann Berry:
    "This is the company that we associate with yellow bulldozers, literally saying we're part of the AI trade." (05:36)
• Tariffs:
  • Tariff impacts raised costs, operating profit down ~$100M YoY, but AI-driven optimism drowned out the negatives.
• Construction Equipment:
  • Commercial markets stabilizing; commercial > residential.

Boeing: One Step Forward, Two Steps Back?

(07:07—10:29)

• Commercial aviation business has lost money six years running (2019–2024) due to:
  • 737 Max groundings, pandemic, safety blowouts.
• Stock up 20% YTD, but Q3 earnings fell short; shares down 4%.
  • $4.9B charge on the 777X program, much higher than expected.
• Perspective:
  • Project started in 2013; first flight 2020; FAA scrutiny persists.
  • FAA now allowing increased production—but backlogs remain.
• Defense Segment:
  • Turnaround: swung from a $2.4B loss to a positive operating profit.
• China Market:
  • Possible landmark jet deal with Chinese airlines (up to 500 orders), contingent on trade negotiations.
• Key Insight:
  • Ann Berry:
    "One really big piece of bad news like that can outweigh a lot of progress..." (08:48)

Etsy: Leadership Shakeup Amid Sliding Numbers—But A Rising Star

(10:29—14:29)

• CEO Josh Silverman stepping down; succeeded by President/Chief Growth Officer Kruti Patel Goyal (ex-Depop).
  • Silverman to be executive chair through 2026 for a fixed tenure—a positive signal for transition clarity.
  • Ann Berry:
    "There is merit to saying, look, it's only going to last for a year…this really is a transition period." (11:13)
• Earnings:
  • Main platform: buyers down 5% YoY, sellers down 11% YoY.
  • Bright spot:
    • Depop (owned by Etsy, bought for $1.6B in 2021):
      • Active sellers +41%, buyers +40% YoY.
      • Depop focus fits broader “recommerce” and sustainable retail trends.
  • Ann Berry:
    "It's an exciting moment for Kruti Patel Goyal because I think she can really demonstrate. Now, was that just depop being something unique or is it actually a skill set that she can apply to rev up the engine on Etsy overall?" (12:40)

3. Listener Q&A: Why Corporate Buybacks Matter

(14:29—17:32)

• Question: Why are share buybacks at a record high, and why do they matter?
• Ann Berry explains:
  • Over $1T in buybacks YTD, across all sectors; companies flush with cash due to strong earnings.
  • Motivation:
    • Low interest rates discourage sitting on cash.
    • Buybacks mechanically lift EPS, boost short-term shareholder returns, and sometimes inflate executive compensation.
    • Critics say buybacks may shortchange investments in workers or future innovation.
    • Political attention: 1% excise tax introduced by Biden, continued under Trump.
    • Buybacks often happen when stock prices are high—companies risk buying at the top.
  • Current state:
    "The market seems to be nodding fairly happily at the way companies are both buying back shares and investing in growth with the cash funding. All this a reflection of how strong profits have been recently, which at the end of the day is good news." (16:51)

4. Market Wrap & Notable News

(17:32—18:50)

• S&P 500: flat; Dow: -0.2%; Nasdaq: +0.5%.
• Nvidia:
  • Up 4% to become first company at $5 trillion market cap.
    • More valuable than many entire chipmakers combined, bigger than whole S&P 500 sectors.
• Brinker International (Chili’s):
  • Shares down 5% despite Chili’s strong sales (+20%). Commodities tariffs starting to hurt prices.

Notable Quotes & Memorable Moments

• Ann Berry (on Fed unity):
  "A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it." (02:01)
• Ann Berry (on Caterpillar’s AI angle):
  "This is the company that we associate with yellow bulldozers, literally saying we're part of the AI trade." (05:36)
• Ann Berry (on CEO succession at Etsy):
  "There is merit to saying, look, it's only going to last for a year ... this really is a transition period." (11:13)
• Ann Berry (on buybacks):
  "Buybacks can inflate compensation without improving the company's fundamentals." (15:45)

Important Timestamps

• [00:02] Fed rate cut and FOMC division
• [03:48] Earnings: Caterpillar, Boeing, and Etsy
• [05:13] Caterpillar CEO on AI and power generation
• [08:48] Boeing’s $4.9B 777X charge explained
• [11:13] Etsy CEO transition context
• [12:40] Depop’s surprising growth
• [14:29] Listener Q&A on corporate buybacks
• [16:51] Ann Berry’s summary: buybacks and market sentiment
• [17:32] Market wrap: S&P, Nvidia, Brinker/Chili's

Final Takeaways

• The Fed’s divided front and limited data cloud the prospect of more rate cuts in 2025.
• Earnings tell varied stories: Caterpillar rides the AI wave, Boeing still haunted by legacy troubles, Etsy bets on a Depop-fueled revival.
• Corporate buybacks hit new highs, drawing cheers and criticisms as companies juggle strong profits, investment, and political scrutiny.
• Keep an eye on tech: Nvidia’s $5T milestone and looming mega-earnings from the likes of Microsoft and Apple signal more market shifts ahead.

For deeper dives, check out Brew Markets daily and tune in for further analysis as earnings season heats up.