• Markets: Stocks slumped yesterday as investors digested Fed Chair Kevin Warsh’s big Jackson Hole speech (more on that below). But Gap rose like the spray from a bottle of Dream perfume after it picked a new CEO for Old Navy.

FOG OF WARSH

Natalie Behring/Getty Images

Just like a date who texted after ghosting you for three days, the tight-lipped Fed Chair Kevin Warsh finally opened up a little about what’s on his mind. Yesterday, he said that the Fed will have “work to do” if inflation doesn’t cool, during his widely watched keynote speech at the Fed’s yearly conference for central bankers in Jackson Hole, Wyoming.

Analysts translated this from Warshspeak as: Don’t be surprised by an interest rate hike soon, *wink wink.* The sound bites were the clearest signal Warsh has given about his outlook since becoming chair—even as he defended his view that the Fed should keep mum on its plans.

Inflation is top of mind

Warsh shared some revealing thoughts about the current economy:

• He noted that inflation remains above the Fed’s 2% annual target and that he doesn’t see recent data showing it cooling as a meaningful improvement.
• Warsh also said that the Fed should focus on inflation rather than the job market—which he deemed stable—and that rate hikes were the main tool to achieve price stability.

Wall Street took it as a sign that Warsh and co. are leaning towards raising borrowing costs. The trading odds of a rate hike at the Fed’s meeting next month jumped from 35% to 58% shortly after Warsh finished speaking, per CME Group data. Bond traders also priced in a rate hike: The yield on the 2-year government bond—which moves in the opposite direction to price and is closely correlated with the interest rates the Fed sets—rose from 4.24% to as much as 4.36% in the hours after Warsh finished speaking.

Meanwhile, the 30-year Treasury yield dipped slightly yesterday, after soaring to a 19-year high last week, which many experts saw at the time partially as a sign that investors doubted that the Fed was prepared to contain prices with interest rate hikes.

What’s next? The Fed will have one more inflation data reading to consider a few days before its September meeting to help it decide what to do with interest rates.

Big picture: While this was the furthest Warsh has gone to offer markets clarity about potential rate moves, he argued that too much communication can confuse investors, who he believes should guide Fed policy instead of the other way around.—SK

      

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World

Tour de headlines

Maryorin Mendez / AFP via Getty Images

🛢️ Trump says deal struck for US to control 65+ billion barrels of Venezuelan oil reserves. The US will have majority control of the oil “through a partnership with private business” and at “no cost” to the US taxpayer, President Trump said on Truth Social yesterday evening. He said the deal would “more than double” American oil reserves. Such an arrangement is unusual, and Bloomberg cautioned that it could be derailed if political winds shift in either country. The announcement comes as global oil supply has been disrupted by the war in Iran. The president has been discussing US access to Venezuela’s oil since arresting the country’s then-president Nicolás Maduro in January.

🛑 Stripe and Advent reportedly drop $50+ billion bid for PayPal. What might have been the largest fintech acquisition ever looks like it won’t be getting processed after all. Bloomberg reports that PE firm Advent and payment processor Stripe are walking away from their efforts to acquire PayPal, an OG in the payments space. They had reportedly offered more than $50 billion for PayPal. An earlier Wall Street Journal report said PayPal—which has a new CEO, and saw its stock rise amid news of the deal talk and a solid second quarter—had been seeking more money.

⚕️ Mounjaro gets approved to lower risk of heart events. The FDA approved Eli Lilly’s blockbuster GLP-1 medication Mounjaro yesterday to cut the risk of heart attack and stroke in adults with Type 2 diabetes. That expands the approved uses of the diabetes treatment as it continues to compete with Novo Nordisk’s diabetes and weight loss drugs. Novo’s Ozempic is already approved to treat cardiovascular disease, and its other drug Wegovy gained approval for lowering risks of cardiovascular events for overweight or obese adults without diabetes in 2024.—AR

THAT’S NOT ALL FOLKS

Warner Bros. Pictures and Ketchup Entertainment

After hitting a tunnel-painted wall three years ago, Coyote vs. Acme finally made it to theaters yesterday. Originally greenlit in 2020 by Warner Bros. Discovery, the film was shelved by the studio before the small distributor Ketchup Entertainment rescued it and released it this weekend to rave reviews.

It was a long road. The film, which follows Wile E. Coyote fighting the Acme Corporation for making shoddy products, cost Warner Bros. ~$70 million, and was already completed when new leadership decided to kill it in 2023 as part of a $115 million tax writeoff. But, unlike other projects the company was tossing, Coyote vs. Acme got stellar reviews from early screenings and critics. The backlash was almost immediate, with Warner Bros. saying it would sell the title to another company:

• Last year, Ketchup said it would buy the worldwide rights to distribute the film for $50 million.
• Then it got to work marketing it, using the real-life story of the movie’s almost-demise as a way to catch audiences’ attention.
• The first teaser trailer was released in April and included digs like, “The Acme Corporation is releasing this film for accounting purposes only.”

How’s it looking? The movie has reeled in a solid $1.7 million in previews and is tracking for a $15 million opening weekend.—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.

➡️ Dachshunds have become one of the most popular dog breeds in the world, in part because their small size makes them ideal furry companions in urban areas. There have probably never been more Pickles and Franks in New York City than there are right now.

➡️ Italy’s Tiramisù World Cup is seeking 130 amateur taste-testers from anywhere in the world to help judge the competition. Travel, accommodations, and Lactaid pills are not included.

➡️ The owner of Teletubbies bought an AI startup that makes interactive characters for children, possibly marking the first time that a company has discussed how to keep Tinky Winky from giving out bomb recipes.

➡️ A woman who was trying to return home to the UK was stranded at an airport in Spain for hours after the UK’s eVisa system confused her with her twin sister. The system’s mistake follows in the footsteps of countless elementary school classrooms on April Fools’ Day.

➡️ General Mills said it officially replaced the artificial colors in Lucky Charms, Trix, and other cereals with fruit-, vegetable-, and spice-based dyes. We hear they’re gonna make the leprechaun and the rabbit join a run club next.—ML

News

What else is brewing

• Over 2,000 people were still missing and more than 500 bodies were recovered yesterday as rescue workers continued to search for survivors of floods in Nepal and Tibet.
• The Treasury Department moved to sanction an Egyptian bank’s UAE branch over its financial ties to Iran as the US attempts to isolate Iran economically.
• A federal judge denied President Trump’s attempt to get the hush money case in which he was convicted of 34 felonies moved from New York state court to federal court. The president’s attorneys filed an appeal of the judge’s decision.
• Milo Yiannopoulos, a self-described professional internet troll known for his right-wing views, was arrested by ICE. Yiannopoulos, who previously spoke in favor of ICE, is a UK national.
• Norway has a new king, King Haakon VIII, who took the throne after his father, King Harald V, died yesterday at age 89.
• Apple TV hiked its prices, so catching the next season of Severance will cost you.
• Miss Virginia was crowned Miss USA this week, making her the first mom to ever win the pageant. She’ll compete in the Miss Universe pageant in November.

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Community

Crowd work

Last week, we asked, “What is the most underrated first dance song for a wedding?” Here are some of our favorite responses:

• “‘I’ll Never Let You Go’ by Steelheart. It starts off like a nice ballad, but then soon kicks it up a notch. The lyrics are perfect for a firmly committed new couple.”—Eric from Granville, OH
• “‘Colour My World’ by Chicago. It was the ultimate ’70s wedding slow-dance staple, but modern couples completely sleep on it. It’s a beautifully simple, under-three-minute masterpiece with an iconic flute solo and a single verse. It brings all the retro, nostalgic elegance without any of the usual wedding playlist clichés.”—Dan from Tarrytown, NY
• “If I can convince my future bride, whoever she may be, I’m going to Rickroll our guests with our first dance: ‘Never Gonna Give You Up’ would be my message to her and to the bit.”—Jonathan, Holmes County, OH
• “My husband and I danced to ‘H.O.E. (Heaven On Earth)’ by LunchMoney Lewis. We have very different tastes in music, but LunchMoney was the first artist we both liked. The song is so unconventional for that setting, but the words and sentiment fit us well. I didn’t want to do the first dance, but looking back, that’s one of my favorite memories of the whole day. Plus, it’s funny to tell people our wedding song is called ‘Hoe.’”—Bethany from Fishers, IN

Here’s the full playlist of songs readers sent in, if you want to judge everyone’s suggestions.

This week’s question

What’s the most fun school assignment you’ve ever had to do?

Sam’s answer to get the juices flowing: “My sixth-grade English teacher had us spend three months reading about a notable person in order to write a lengthy biographical paper, dress up as them, and present their lives in a school-wide exhibit called the ‘living history museum.’ It felt like a social mixer that transcended centuries with Shaq, Joseph Stalin, and Renaissance painter Sofonisba Anguissola all hanging out in the same room.”

Submit your response here.

recs

• How to watch thousands of movies online for free.
• It’s not a trip to Europe, but you can visit a castle in every US state.
• Fall baking projects to embrace the flavors of the new season.
• A riveting true crime read about a Gulf Coast conman who weaponized the justice system in twisted ways.**

^{*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 Crossword: Your sample clue from our biggest puzzle of the week is “Actor Nick who was People magazine’s Sexiest Man Alive in 1992.” Play the Crossword here.

Open House

Welcome to Open House, the only newsletter section that refuses to accept that frontier living is incompatible with a hot tub. We’ll give you a few facts about a listing and you try to guess the price.

Today’s property is a luxurious log house located on a gated ranch in Jackson, WY, about an hour’s drive from the lodge where central bankers pilgrimage for the Fed’s yearly symposium. The 10,988-square-foot main dwelling (plus 1,062-square-foot guest house) offers breathtaking views of the Teton Mountains and is a stone’s throw away from three national parks and the National Elk Refuge. Amenities include:

• 7 beds, 9 baths, and 37 acres
• Pool, hot tub, and gym
• Home theater and bar with cowboy-saddle seats

How much for this life of rustic affluence?

Answer

$39.5 million

Word of the Day

Today’s Word of the Day is: symposium, meaning “a formal meeting at which several specialists deliver short addresses on a topic or on related topics.” Thanks to Theo from Ohio for the special suggestion. Submit another Word of the Day here.