• Markets: Stocks swung up yesterday, with the Dow in particular rebounding as investors were hopeful once again that a deal to reopen the Strait of Hormuz could be coming. Elsewhere, Costco was thanking God it was Friday after it spiked on the news of an earnings beat.

FOR SALE? MAYBE NOT

Illustration: Shannon May, Photo: Adobe Stock

Home financing costs are doing the part of the Cha-Cha Slide where they bring it to the top like they’ll never ever stop. Amid ongoing inflation, economists are wondering how high average 30-year US mortgage rates will go after topping 7% this week for the first time since early 2025, according to Freddie Mac.

The surge comes after the Federal Reserve raised interest rates last week for the first time in three years, a decision that markets saw coming: Before the rate hike, mortgage rates and Treasury bond yields—which generally move in tandem—spiked in anticipation.

Forecast: “There’s no reason to think that the rout [in bonds] couldn’t continue, and rates get closer to 8%, or even higher,” the chief economist at Moody’s Analytics told Barron’s. But…

• This worst-case scenario—as another economist characterized it to Barron’s—would require “significant deterioration” in the US dollar’s safe-haven status and a continued Treasury bond sell-off.
• Those factors hinge largely on the Iran war and its inflationary impact on the prices of energy and general goods. Alongside rising federal debt, this has rattled investors’ appetites for government bonds (and not just in the US).

Researchers thought this year would go differently

Mortgage rates fell below 6% in February for the first time since 2022, giving housing experts hope that market activity might return to normal this year…until the Iran war started, and the spring home-selling season flopped.

Now, economists expect that mortgage rates surpassing the psychologically significant 7% threshold will have a chilling effect on home sales. For context, homeowners who locked in ~3% rates during the pandemic could pay thousands of dollars more per month if they moved and got a new mortgage for the same amount.

Already…high mortgage rates contributed to a 2% month-to-month dip in existing home sales last month, according to the National Association of Realtors. They’re also leading some borrowers to opt for riskier, adjustable-rate loans.—ML

      

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World

Tour de headlines

David L. Ryan/Getty Images

🌀 A powerful nor’easter is battering the East Coast. Per NBC News, coastal flood alerts are in effect for 33 million people along the Eastern Seaboard, including the New York metro area. Heavy wind and rain are expected to hit states ranging from Virginia to Rhode Island throughout the weekend, intensifying as it moves north. The severe weather could cause power outages and travel delays: A number of major US airlines have already waived change fees for the weekend. The rain could continue into next week, but the wind is likely to weaken as the tempest spins away from the coast on Monday.—AE

🤖 Microsoft announced sweeping changes to Copilot. The tech giant is repositioning its flagship chatbot as the “AI built for work,” rather than trying to continue competing with OpenAI’s ChatGPT and Anthropic’s Claude as a personal consumer bot. Accordingly, Microsoft is turning Copilot into a unified “super app” that will host Office products, like Excel and Word, directly inside of it. For instance, users can now ask the chatbot to modify a Word document without leaving the Copilot platform. Microsoft’s strategy shift comes as Meta’s new Muse personal assistant has surged to the top of app charts.—AE

🎥 Trump bans CNN from Air Force One, reviving hostilities with press. Yesterday, the weeklong standoff between the White House and the Washington press corps seemed to end when the former let CNN film an event with President Trump and Xi Jinping at the National Archives, and the TV press pool resumed its coverage. But last night, a CNN spokesperson said that the network had been barred from joining Trump on Air Force One to cover an event in Tennessee today. An email sent by the White House last night outlined details of the trip but did not name a primary TV press pool representative, according to the New York Times, making it unclear if the other pool members would participate today or resume their boycott. On Thursday, a federal judge ordered CNN journalists’ credentials to be restored immediately.—HVL

A BOOK OR BOT

Joel Saget/Getty Images

A French novel published earlier this year about a Haitian refugee fleeing to Canada was headed for top literary prizes in France until an anonymous X account claimed its writer committed a bigger sin than overusing similes: using AI.

Thélyson Orélien’s debut novel, C’était ça ou Mourir (which translates to It Was That or Dying), was taken off the longlist yesterday for the Prix Goncourt, one of France’s most prestigious awards, because of the allegations.

Quel scandale: The accusations came from a small anonymous account that claimed to have fed random passages of the novel into the AI detection program Pangram, which determined the selected passages were 100% AI generated based on patterns in the writing. Academics subsequently using similar programs also found high percentages of AI-generated content in Orélien’s book.

Orélien has denied the accusations, saying that his writing style uses Haitian and Caribbean repetition and rhythms. He told news outlets he is preparing a file to prove his innocence. While AI software detection programs have been criticized for casting too wide a net and being trained primarily on European text, Pangram’s founder, Max Spero, claims the program has a false-positive rate of 1 in 24,000.

Like any mystery that starts on the internet…online sleuths are digging in, and they claim to have found examples of plagiarism in a past essay and novella written by Orélien.—MM

      

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ICYMI

Have you heard...

Here’s everything that didn’t make it into this week’s newsletters but we immediately sent to the group chat.

➡️ New York Knicks star Jalen Brunson will host Saturday Night Live tonight. Actually, the Spurs’ Victor Wembanyama will host the first 12 minutes, but Brunson will take over after that.

➡️ Nvidia CEO Jensen Huang gave a whopping out-of-touch-guy quote to The New York Times: “I actually don’t know my address.” That’s also what women tell me at bars when I ask for their email.

➡️ CBS Sports launched hoopHer, a new social media vertical covering the WNBA and NCAA women’s basketball. Finally, a centralized location for women to hear men complain about women’s sports in the comments.

➡️ For the first time in 15 years, the New York City Marathon is changing its route. Just when you thought people who are running the marathon this year were out of ways to bring up the fact that they are running the marathon this year.

➡️ The new season of Love Is Blind is coming to Netflix on Oct. 14 and will take place in Boston. About 100 miles to the west, look for the spinoff dating show Love Is N-95 Masked Even If a Bar Owner Leaves For Clown School.—DL

News

What else is brewing

• Anthropic will remain blacklisted by the Pentagon after a federal appeals court upheld the Trump administration’s designation of the company as a supply chain risk.
• Additional instances of OpenAI agents misbehaving this summer have emerged, with the tech interacting with several government agencies’ websites in unexpected and concerning ways, according to the company.
• Brightline, the once-promising private Florida railroad, filed for bankruptcy after it was unable to repay finances. It will continue operating as it restructures, Bloomberg reported.
• Bill Gates will warn on tomorrow’s Meet the Press that AI is powerful enough to kill a billion people, according to excerpts released by NBC.
• Manchester City was found guilty of all but one of the 115 charges brought against the elite English Premier League club for breaching the league’s financial rules.
• Two men were arrested in connection with the latest New York manhole mystery, saying they had entered the sewers to fight Shredder look for valuables.

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Community

Crowd work

Last week, we asked, “What’s a travel hack that’s never failed you?” Here are some of our favorite responses:

• “Buy a neck pillow cover and stuff it with extra clothes that won’t fit in your carry-on! I throw all my running shorts and shirts in there, and I also have a comfy neck during the flight.”—Kaitlyn from Mont Vernon, NH
• “I carry three clothespins in my Dopp kit to close the gap in the curtains. Works like a charm to darken the room.”—Ed
• “I use shower caps from hotels to cover my shoe soles before putting them in my bag. I don’t have to worry about anything gross from the bottom of my shoes getting on anything else, and I can just pack them wherever they fit!”—CJ from Fresno, CA
• “My friend is an art history major and told me that art museums with paintings are temperature controlled. So, if it’s scorching in Europe, it’s a good bet for some AC.”—RJ from Chicago
• “Put clean sheets on your bed before you leave. There’s nothing like coming back to your own bed—except coming back to your own bed with clean sheets!”—Chris from Winter Park, FL

This week’s question

What’s a place you visited that was much more pleasant than you imagined?

Sam’s answer to get the juices flowing: “I recently went to a barbecue in Staten Island and realized it doesn’t deserve the reputation of New York’s forgotten borough. Its slower pace, tight-knit communities, quiet beaches, and magnificent city skyline views make it seem like a great place to live.”

Submit your response here.

recs

• The 100 best TV shows of the 21st century.
• Press this button to blow bubbles in someone’s Florida backyard.
• Six of the best scents to wear this fall, according to perfumers.
• A nifty clip-on accessory pack to carry your things on a hike.**

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Play

Brew Crossword: Our big puzzle this week is called “Take it back,” which itself is a clue to something going on in the puzzle. Play the Crossword here.

Open House

Welcome to Open House, the only newsletter section seriously considering heading west for gold. We’ll give you a few facts about a listing, and you try to guess the price.

Today’s property is a four-acre, riverfront California resort town (technically a “census-designated place”) called Belden Town, originally established in the early 1900s. Only 15 people live in Belden, most of them employees of the resort you would own. Amenities include:

• Seven cabins, 18 hotel rooms, and 16 RV spaces
• Luxurious owners’ quarters
• A general store

How much to own the entirety of Belden?

Answer

$4.75 million

Word of the Day

Today’s Word of the Day is: tempest, meaning “a violent windy storm.” Thanks to Harry from Florida for the suggestion. Submit another Word of the Day here.