• Markets: Like your favorite cocktail, stocks were mixed yesterday. Tech stocks, in particular, got a bump from economic data suggesting the Fed might not need to rush further rate hikes (more on that below). Meta capped off its best month since 2022 as its AI agent app, Muse, proved popular.

CHANGE FOR THE BETTER

Illustration: Morning Brew Inc., Photo: Robert Nickelsberg/Getty Images

Yesterday’s softer-than-expected inflation reading for August and a massive upward revision to Q2 gross domestic product were among the indicators that the economy is humming along—and that a second interest rate hike before 2026 ends may not be as sure of a thing anymore:

• The Fed’s preferred inflation gauge, the personal consumption expenditures price index, rose 0.3% for the month and 3.4% over a year ago. The top-line number is still far above the Fed’s goal of 2%, but below the 3.7% estimate from Dow Jones.
• The core rate, excluding volatile food and energy prices, was 3%, also up 0.3% for the month and below expectations.

Meanwhile, revised data from the Commerce Department showed the GDP rose 2.2% for Q2—up from its original estimate of 1.5%. The US Bureau of Economic Analysis (BEA) also revised another metric the Fed uses to gauge underlying economic trends upward for Q2.

All consuming: Despite a survey from the Conference Board on Tuesday that showed consumer confidence at a near 12-year low in September, consumer spending for the same month was up 0.9%, per the BEA.

What this means for interest rates

Earlier last month, the Fed raised rates to a range of 3.75%–4.00%, the first increase in three years. On Monday, the odds of a second hike in October were 70%, per FedWatch. That fell to 51.5% on Tuesday after New York Fed President John Williams said there was “no urgency” for another rate increase, and it dropped again to 41.5% after yesterday’s data dump.

Big picture: The new data suggests that, despite high oil prices and tariffs adding pressure, the economy remains solid. But there is one area where the numbers are still concerning: the bond market. The 10-year Treasury bond yield hit a 24-year intraday high yesterday.—DL

      

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World

Tour de headlines

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✈️ A disaster was averted on a plane headed for Israel. A FlyDubai flight to Tel Aviv made an emergency landing in Saudi Arabia yesterday after one pilot stabbed another and attempted to crash the plane, Israeli Prime Minister Benjamin Netanyahu said. Details are still being investigated, but the flight data showed a sudden drop in altitude. Passengers and crew members subdued the attacker, and the plane, which had 170 people on board, was able to land safely

📄 Fed watchdog finds mismanagement but no crimes in building renovation. The Federal Reserve’s internal watchdog concluded there was neither illegal behavior nor administrative misconduct in the central bank’s $2.5 billion overhaul of headquarters that began in 2022. “At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred,” the Fed’s inspector general’s report issued yesterday said. However, it did find that the costly project had not been properly managed. The report comes after President Trump criticized former Fed Chair Jerome Powell last year over the reno as he sought to pressure the Fed to lower interest rates.

🏠 Apple wants to make your home smart. The iPhone maker is hoping to make the leap out of your pocket and into your house with a new smart home hub device that’ll become available on Oct. 13, Bloomberg reported yesterday. Apple’s push into the smart home market was initially slated for 2024, but ended up delayed while the company tweaked its souped-up AI Siri. With the AI-powered assistant recently making its debut, it’s now the smart home display’s turn. Trying to make it in this new arena presents one of the first big tests for new CEO John Ternus—who is reportedly planning layoffs to make the company leaner and to prevent these kinds of product development delays in the future.—AR

Reader Poll

CODE OF CONDUCT

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Widespread criticism and accusations of investigative mishandling are mounting against Cornell University and its local officials this week, after a former student filed a lawsuit as Jane Doe accusing seven university fraternity members of gang-raping her two years ago after pressuring her to take drugs.

Online uproar over the alleged assault began last week, after the university’s independent student newspaper, The Cornell Daily Sun, reported on the lawsuit, which alleges that Cornell temporarily suspended the defendants in 2024 and gave them the chance to write essays to lessen their punishments.

Since then…

• Local District Attorney Matthew Van Houten announced on Monday that he reopened the case and is considering seeking criminal charges. He said his office didn’t do so in 2024 because it believed Jane Doe’s sworn statement described consensual actions.
• CBS then reported that it obtained a transcript of Jane Doe’s initial interview with campus police, in which she told them “I can say with 100% confidence I was raped.” Van Houten told CBS he never saw that transcript, while Cornell said its police department “shared all investigatory information” with the DA.
• Yesterday, the New York Attorney General’s office said it would review Cornell’s handling of the case.

Zoom out: USA Today reported that Cornell rarely expels students accused of sexual violence, which experts say reflects a nationwide trend on campuses. The Cornell case has also prompted renewed scrutiny of what critics call a “voluntary intoxication loophole” that makes it harder to prosecute some rape cases in 19 states, including NY.—ML

      

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Ken invests in beach

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Ken Griffin wants more college students coming to Miami…but not to get turnt on the beach during spring break. The billionaire founder of the hedge fund Citadel announced yesterday that he’s donating $2 billion to establish a Miami campus of Carnegie Mellon University, the Pittsburgh school renowned for its engineering programs.

Griffin said he’ll also give $1 billion to the school’s flagship location in Steel City, making the $3 billion combined donation the biggest private gift in higher ed history, according to the school.

Engineering Miami momentum

Bringing a top-tier STEM school to Miami is part of Griffin’s effort to cement the city’s status as an emerging finance and tech hub after he moved Citadel’s HQ there from Chicago in 2022:

• The new campus will prioritize nontraditional academic offerings addressing societal issues like human health, climate adaptation, and national security.
• It’s targeting a 2028 opening, with plans to accommodate 3,500 undergrad, master’s, and PhD students.

Citadel has historically employed many Carnegie Mellon grads as quantitative traders. Now, Griffin says talent minted at a beachier version of the school will attract companies to the city, which is already booming thanks to corporate relocations and ultrawealthy transplants.

This is just one piece…of Griffin’s yearslong quest to turn Miami into a knowledge worker magnet. He’s also pouring $2.5 billion into developing Citadel’s Miami corporate campus and has donated tens of millions to local research hospitals.—SK

      

MOLLY EXPLAINS THE INTERNET

Hollywood might want the viral MA lesbian bar saga

Nick Iluzada

The online world can be a beautiful yet confusing series of tubes. On Thursdays, the Brew’s Molly Liebergall untangles them for you.

A story about the fallout that ensued when a Western Massachusetts bar updated its mask policy has dominated the zeitgeist for more than a week now, so naturally, filmmakers want in.

ICYMI: “All hell broke loose” after Last Ditch Bar, a Covid-conscious lesbian bar, recently tweaked its mask-mandatory policy to make KN95s optional on Saturday nights, in an effort to boost its faltering business, the Boston Globe reported on Sept. 22.

• The saga was propelled to internet stardom by details like one of the bar’s founders stepping back to attend clown college and one angry patron saying they hoped the bar gets “firebombed” for its decision.
• The Boston Globe said the story drove thousands of new subscriptions and became one of its most-read pieces.
• But it also ignited a wave of trolling that led Last Ditch to turn off comments on Instagram and Google Reviews and to ask the public to stop harassing a patron who was quoted in the article.

Now…UTA—the talent agency representing the Boston Globe—has received inquiries for both scripted and documentary adaptations of the story, according to the Hollywood Reporter.

Zoom out: Grappling with tough economic conditions, many gay bars—which tend to handle a smaller demographic than average bars—have closed in the US in recent years. Last Ditch launched a donation page in April to pay overdue rent and reimburse workers who waived their salaries to help keep the bar afloat.—ML

News

What else is brewing

• Tennessee Gov. Bill Lee halted the state’s last remaining scheduled execution for the year after state officials attempted to execute Christa Pike with two doses of a lethal drug that did not cause her death and resulted in her hospitalization.
• The UK believes that Iran played a role in a thwarted attack on a military base there used by US forces.
• The US military has withdrawn from Iraq after 23 years.
• The FTC is investigating the dangers posed by products from OpenAI, Anthropic, and other artificial intelligence companies.
• Eli Lilly said its new drug combination helped people lose up to 23% of their weight in a study of people with diabetes, suggesting it could be even more powerful than current weight loss medications.
• David Ellison will bring Mattel CEO Ynon Kreiz on as co-CEO of Paramount once it closes its merger with Warner Bros. Mattel will be replacing Kreiz, who helped turn the world pink with the Barbie movie, with Condé Nast CEO Roger Lynch.

recs

• A flowchart to help you pick your next book.
• Tricks for becoming a morning person—even if you’re a night owl.
• Find your state on this map of US grocery prices.
• Lean into nostalgia with this plush dog toy.**

^{*A message from our sponsor. **This is a product recommendation from our writers. When you buy through this link, Morning Brew may earn a commission.}

Play

Brew Mini: Today’s puzzle is small, but it’s full of special cases. Play the Mini here.

Three Headlines and a Lie

Three of these headlines are real and one is faker than the frozen dairy desserts masquerading as ice cream in the freezer aisle. Can you spot the odd one out?

1. Cows drink kombucha? Yes, and they’re mad about the shortage.
2. Waymo drives through farmers’ market in Denver
3. Dogs will fight bears. But not because of the reason you might think.
4. A supermarket opened a pub to get around liquor laws. Now it needs bouncers.

Answer

We made up the one about cows drinking kombucha.

Word of the Day

Today’s Word of the Day is: masquerading, meaning “pretending to be someone or something you are not.” Thanks to Phillip from Portland, ME, for not hiding the suggestion. Submit another Word of the Day here.