By Alan Murray and David Meyer
April 12, 2019

Good morning.

Jeff Bezos sent his annual letter to Amazon shareholders this year, and Fortune’s Chris Morris summarized four key themes:

Antitrust scrutiny is a looming threat. Bezos didn’t mention it directly, but he starts his letter with a chart showing the rise in the percentage of goods sold on Amazon by independent third parties—it has gone from 3% in 1999, to 58% in 2018. “Third-party sellers are kicking our first party butt. Badly,” Bezos wrote. No antitrust case here!

Amazon is headed for failures. The company experiments all the time, and some of these experiments are going to be big failures. “If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle.” He didn’t single out any one of the company’s big bets, but I still have some questions about Whole Foods.

Worker pay needs to rise. After raising his workers’ minimum to $15 an hour, Bezos challenged other retailers to do the same. “Today, I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage. Do it! Better yet, go to $16 and throw the gauntlet back at us.”

More brick and mortar to come. Bezos highlighted the company’s brick and mortar stores that do away with checkout lines. “The reward has been the response from customers, who’ve described the experience of shopping at Amazon Go as ‘magical’.” The company now has ten stores in Chicago, San Francisco and Seattle. Expect more to come.

And since it is Friday, I’ll share feedback from the very thoughtful SK, who believes I was too flip on Monday in tying President Donald Trump’s Fed nominees to “a president whose modus operandi is to undermine anything he sees as a threat:” “Putting pro-growth and small business-sensitive voices into the Fed discussion is a positive move,” SK writes. Fair enough—and I have no particular problem with the monetary policy views of Steven Moore, who I have known for many years, or Herman Cain. But I do think President Trump sees a recession as possibly the biggest threat standing in the way of his reelection, and therefore is giving Fed Chairman Powell the same treatment he previously aimed at Robert Mueller, Jeff Sessions, the CIA, the FBI, the federal courts, etc.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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