• Markets: Stocks did not give Kevin Warsh a standing ovation on his big day, falling yesterday after the Fed raised interest rates and Warsh highlighted continued inflation risks.
• Stock spotlight: At least someone had a stellar day. SpaceX rose after announcing it scheduled its next Starship launch date for Sept. 22.

GETTING A RAISE

Andrew Harnik/Getty Images

In a clean sweep, the Fed’s Open Market Committee voted 12–0 to raise interest rates yesterday by a quarter point to the 3.75%–4% range. It’s the first time the Fed has increased interest rates since July 2023—and most Fed officials expect to do so one more time this year, since inflation remains well above the Fed’s 2% target.

Everyone knew it was coming. With the Fed’s preferred inflation measure showing July inflation holding strong at 3.7% compared to the same time last year, a separate measure of inflation also ratcheting up, and no end in sight for the war in Iran sending oil prices up, investors and economists would have been more surprised if Fed Chair Kevin Warsh didn’t announce a rate increase. Still, it’s a big deal, since these rates set borrowing costs, affecting loans for individuals and businesses and everything from mortgage rates to AI investment.

But just because it was anticipated doesn’t mean there wasn’t drama. The rate cut comes after President Trump has repeatedly called for rate cuts…and nominated Warsh as Jerome Powell’s successor assuming he’d deliver them:

• The hike was viewed as a positive sign for Fed independence, and Warsh dodged numerous questions during his post-announcement press conference about the president’s potential reaction.
• Trump posted on social media claiming that rates should be at 1% “or less,” and urged the Fed to lower interest rates without calling out anyone in particular.

How have markets responded?

Much of the movement happened before the announcement, with mortgage rates and Treasury bond yields spiking, as markets anticipated rates would rise.

But Warsh’s brief remarks yesterday, in which he repeatedly mentioned that inflation had not abated, sent stocks down over fears of future increases. (Warsh spoke for just under 30 minutes rather than the typical 45 minutes.)

Looking ahead…while Warsh was careful not to precommit to any future move, comments underlining his dissatisfaction over inflation’s trajectory drove home the central bank’s intent.—MM

      

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World

Tour de headlines

Jean-Christophe Verhaegen/Getty Images

🇪🇺 🇨🇦 EU open to welcoming Canada as an “associate member.” European Commission President Ursula von der Leyen said yesterday that she’d work to make Canada the first associate member of the 27-country bloc—which would likely include closer economic and defense ties. Even if you weren’t paying attention in geography class, you’re probably aware that Canada is not in Europe. However, von der Leyen said a closer alliance makes sense because Canada, its Prime Minister Mark Carney (who was present for her speech) and Europe “believe in democracy.” Carney, who is scheduled to address the EU Parliament today, has been pushing for closer ties with Europe amid a trade war with the US. The European relationship with the US has also shifted as the US has pulled back support for NATO.—AR

🇺🇸 President Trump threatened EU with tariffs over Canada’s associate member bid. “If I think it’s at all a hostile act, I will put very serious tariffs or stop trading with Europe on many things,” Trump told reporters when asked about Canada potentially becoming an associate member of the EU. Earlier this year, the bloc seemed wary of Germany’s proposal to make Ukraine an associate member. EU President Ursula von der Leyen said that a potential arrangement with Canada would focus on shared manufacturing, tech, and defense work. Associate membership doesn’t exist as a category and would require the ratification of member states in order to come to fruition.—HVL

🏛️ Congress left early for vacation. Like your boss telling the team to knock off early on the Friday before a long weekend, House Speaker Mike Johnson is sending Congress home unexpectedly early before a scheduled break—but unlike when your boss does it, this gets Johnson and his colleagues out of difficult votes before the midterm elections. He canceled all votes scheduled for today, sending the House off a day early for a recess they won’t return from until Nov. 9. That pushes a vote on Republican Rep. Thomas Massie of Kentucky’s resolution to impeach Defense Secretary Pete Hegseth until after the election, and gives the House a little extra time away amid calls for AI regulation. The Senate’s still around for another three weeks.—AR

A-TEAM OUT

Theo Wargo/Getty Images

The “Shape of You” singer is on an island of one, or at least he might be at his next concert. Ed Sheeran is facing mounting criticism after Macklemore was ousted from his tour this week for voicing support for Palestine, leading the rest of Sheeran’s supporting acts to drop out in solidarity.

Yesterday, the band Massive Attack joined the chorus condemning Sheeran’s handling of the situation. That followed supporting acts Beoga, Finneas, Lukas Graham, and Aaron Rowe quitting the tour in support of Macklemore and Palestinians. One act referenced reports that Israeli operations in Gaza have killed more than 1,000 Palestinians since last year’s supposed ceasefire.

ICYMI: After Macklemore said “Free Palestine” and performed his protest song “Hind’s Hall” at a show at MetLife Stadium earlier this month:

• Macklemore said Robert Kraft, the billionaire owner of the Patriots and Gillette Stadium, rallied other venue owners and told Sheeran that they wouldn’t let him play if he brought Macklemore.
• Kraft didn’t deny Macklemore’s statement, but called the rapper’s past rhetoric “antisemitic.”
• Sheeran said Macklemore’s firing was his promoter’s decision, not his, and that “there is a reason I do not use my professional platform for politics” (though commenters pointed out that he’s shown support for Ukraine).

So far, Sheeran has lost 200k+ Instagram followers. His tour is scheduled to continue in Philadelphia on Saturday.—ML

      

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VOICING EXCITEMENT

Illustration: Morning Brew Inc., Photos: Apple

Apple’s updated Siri is drawing overwhelmingly positive reviews after debuting along with iOS 27 on Monday. Early testers are raving about the ability of the voice assistant now known as Siri AI to function on the same level as Claude and ChatGPT.

Siri AI, which is available in its own app, is currently in beta, which means there may still be some bugs to work out. But here’s what people who got a sneak peek at the redesigned personal assistant are saying about how it compares to the older version that always seems to come up unbidden on your phone:

• TechCrunch reports Siri can now handle complex requests. The outlet also found it more useful in the Camera app, as it’s more adept at identifying the images in frame.
• Wirecutter said it’s much better at sifting through messages to find links and information buried in your text conversations and emails.

Reviewers are also praising the new iOS overall: CNET combed through all of the new features and said it likes that users have more control over the transparency levels of Liquid Glass. There are also stronger child safety protocols, and Safari is more intuitive.

But…while the Wall Street Journal agrees that the new version of Siri is finally worthy of the hype it got when it was first announced in 2024, the newspaper said the tech still has a ways to go before the iPhone becomes the “intelligent personal hub” new Apple CEO John Ternus promised.—DL

      

Reader Poll

MOLLY EXPLAINS THE INTERNET

‘Oreo-gate’ was an ad for an AI music app

Niv Bavarsky

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

The newest flavor of Oreo is deception. A recent viral story about a mom trying to police her group chat’s school lunch policy turned out to be a marketing tactic for Suno, an AI song-generating platform that’s attracted several copyright lawsuits.

If you don’t have kids, this stunt—and the outrage that it manufactured—may have missed your feed. In short, a woman who goes by @ashleighjamz garnered millions of views on Instagram with a series of videos featuring screenshots that appeared to show her parent group chat arguing after one mother asked the rest not to pack Oreos in their kids’ lunches, since she doesn’t allow her child to eat them. The other moms refused and sent more cookies in defiance.

But none of the mom drama appears to be real. All of the posts are set to Suno-generated songs that turned the group chat texts into lyrics (a common use for AI music apps), and they’re all tagged #sunopartner. Suno confirmed to Business Insider that @ashleighjamz is one of their paid partners, but said it didn’t control what she posted. Meanwhile, the creator stopped responding when the outlet asked follow-up questions about the story’s legitimacy.

Oreo, for its part, told BI that it wasn’t involved, but it still tried to capitalize on the stunt with its own post.—ML

News

What else is brewing

• Three people were killed when an NBC Los Angeles helicopter crashed while covering a fatal bus collision on Tuesday night. The victims were identified as photojournalist Eliana Moreno, pilot George Marciniw, and pedestrian Edy Gutierrez Mejia.
• Charlie Kirk’s family blames Utah officials for failing to prevent his assassination, and may sue for wrongful death.
• OpenAI CEO Sam Altman plans to attend a state dinner when China’s Xi Jinping is in the US next week.
• American Airlines said that 30% of its seats account for half of the company’s revenue as carriers race to provide more front-of-plane seats and perks.
• Travis Kelce was named among the victims of a $35 million Ponzi scheme.
• Lena Dunham announced the birth of her child via surrogate. The Girls creator had a hysterectomy in 2018 due to her endometriosis.

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Play

Brew Mini: Today we have a small-but-mighty Monster Mini for you to try. The clues are much harder than normal, but they each have a very informative hint if you need it. The challenge is to solve it with as few hints as possible. Play the Monster Mini here.

Three Headlines and a Lie

Three of these headlines are real and one is faker than a save the date via text. Can you spot the odd one out?

1. JD Vance calls ‘Emily in Paris’ the ‘Shakespeare of our time’
2. A Tennessee high school will pay for their homecoming dance with a hot dog eating contest
3. Cash-strapped Japanese monks turn to investing as inflation worsens
4. Netflix sets ‘New Stanford Prison Experiment’ unscripted series for October release

Editor’s note: We’re sorry to anyone who was psyched to do our Word Search yesterday only to find the link wasn’t working. But you don’t have to go without your Word Search for the week; you can play it today here.

Answer

We made up the one about the high schoolers eating hot dogs.

Word of the Day

Today’s Word of the Day is: trajectory, meaning “a path, progression, or line of development.” Thanks to Diana Alamogordo from New Mexico for a suggestion that hit. Submit another Word of the Day here.