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The Fed signals it might finally cut interest rates

The Fed's new policy is 'We'll cut rates... eventually.' At the annual Jackson Hole conference on Friday, Federal Reserve Chair Jerome Powell suggested that the slowing job market may justify cutting interest rates, even though inflation remains a concern.

Why cut interest rates now?

In its last five meetings, the Fed has kept interest rates unchanged. On Friday, Powell warned that any future rate decision will largely rely on upcoming employment and inflation data. So, how do things look now?

• Hiring has slowed and unemployment remains low, which puts the economy in a “curious balance” that makes the Fed uncertain about cutting rates, Powell said.

• Core inflation is sitting at 3.1%—still above the Fed’s 2% goal—but not as bad as some economists expected.

Powell signaled the need to "proceed carefully" under current conditions, and despite the optimistic tone, gave no firm commitment to a cut.

Why do rate cuts matter? When the Fed holds interest rates steady, borrowing costs stay high, which can keep credit card and loan payments expensive and push everyday prices up. Lowering rates makes borrowing cheaper, encouraging spending and business investment, which can boost employment and general economic growth. See an overview of the topic here.

Will there be a cut or not? 

Probably, but you never know with Powell. Regardless, traders were largely optimistic and raised their expectations for a rate cut at the Fed’s next meeting on Sept. 16-17:

• As of writing, there’s an 85% chance of a rate cut next month, up from around 75% a couple of weeks ago, per FedWatch data.

Investors responded happily: Markets surged on expectations of a quarter-point rate cut, with the Dow jumping 700 points to a record high. The S&P 500, NASDAQ, and Russell 2000 also closed higher, but have since tapered off.

Infamous cartel leader “El Mayo” pleads guilty to drug trafficking charges

I guess he couldn’t ‘weed’ out the charges. Ismael “El Mayo” Zambada pleaded guilty in Brooklyn court yesterday to federal charges of racketeering conspiracy and operating a continuing criminal enterprise.

Infamous drug kingpin

The 77-year-old drug lord co-founded Mexico’s Sinaloa cartel, believed to be the world’s largest drug trafficking organization, along with the more well-known Joaquín “El Chapo” Guzmán.

As part of his plea, Zambada admitted to directing the cartel’s operations from 1989 to 2024. His roles included:

• Overseeing the trafficking of over 3.4 million pounds of cocaine into the United States.

• Ordering murders to protect the organization.

• Bribing Mexican politicians, police, and other officials.

Zambada was arrested last year in El Paso, Texas, after arriving in the US on a private plane. He continues to claim he was kidnapped and betrayed by one of El Chapo’s sons.

How bad is the Sinaloa cartel? In the early 2010s, the group controlled up to 60% of Mexico’s drug market, making up to $3 billion a year. It is still a major exporter of cocaine and heroin to the US, fueling the opioid epidemic, and has been linked to kidnappings, assassinations, and torture.

How long will he go away for?

Under the conditions of the plea deal, Zambada will spend the rest of his life behind bars, with the official sentencing scheduled for January of next year.

• Additionally, the drug lord is required to forfeit $15 billion in assets.

Looking ahead: Since the capture of its two most prominent leaders—Zambada and Guzmán—the cartel has split into rival factions, fueling a surge in violence across the Mexican state of Sinaloa that hasn’t been seen since 2008.

Cracker Barrel rebrand sparks intense backlash

Imagine a new logo so bad even Steak ‘n Shake flames you. Cracker Barrel recently updated its logo, removing the image of an old man sitting next to a barrel and replacing it with a simplified, text-only look. However, the response has been anything but welcoming.

Refreshed & modernized

The bold new look quietly tossed the chain’s beloved “Old Timer” character from its branding, which had been front and center since Cracker Barrel’s founding in 1969.

While most of the attention is on the logo, that’s not all that’s changing. The rebrand is part of a $700 million, multi-year strategy designed to bring in fresh customers:

• Cracker Barrel’s “All the More” campaign also introduced refreshed menus with new items, a modernized interior look, and the removal of cluttered homey wall decorations.

The rebrand was meant to connect with younger customers while preserving the chain’s country roots, but it has instead alienated a mass of existing customers who consider the change, to put it mildly, not great.

Back to the drawing board

The company’s modern facelift triggered intense pushback, with many customers accusing Cracker Barrel of abandoning tradition with a “woke” and “boring” redesign, which quickly turned into a social media firestorm:

• Steak ‘n Shake said in a post on X that Cracker Barrel aims to “delete the personality” of the brand and “scrape away” its heritage. The post garnered over 200,000 likes.

• A post from the Democratic Party’s official X page claimed they think the “rebrand sucks too,” which gained over 13 million views.

Despite the harsh criticism, CEO Julie Felss Masino told Good Morning America that customer feedback on the renovations has been positive, saying, “People like what we’re doing.”

Investors joined the hate train as well: Amid the storm of outrage, Cracker Barrel’s stock plumeted nearly 15% intraday, causing the company to lose almost $100 million in market value in just one day.

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The US government just became Intel’s largest shareholder

I guess Uncle Sam’s newest hobby is investing in tech stocks. In a rather unusual move, the US government bought a nearly 10% stake in the chipmaking company with an investment worth $8.9 billion.

State-sponsored sale

Intel sold shares to the government at about $20 apiece (slightly below market value), making Washington its largest single shareholder. But the deal comes with conditions:

• The US government will not get a board seat or have any decision-making rights in the company.

• If Intel ever controls less than 51% of its contract manufacturing division, Uncle Sam automatically gains another 5% stake in the company.

Intel plans to use the funding to scale its US-based semiconductor manufacturing, including its new Arizona fabrication plant, to reinforce its role as a cornerstone of American chipmaking.

Did the government outright buy shares? Not exactly. The deal combines previously awarded funds from the CHIPS Act (see overview) and the Pentagon’s Secure Enclave program into stock holdings.

Why step into the private sector?

The move is meant to strengthen domestic chip manufacturing and help Intel keep up with overseas rivals, particularly those in China. However, the deal has sparked some debate:

• Supporters say it’s a strategic move that bolsters national security and helps the US gain technological independence.

• Critics warn that government ownership could curb innovation, politicize companies, and shortchange shareholder value through discounted share purchases.

Regardless, it marks the latest foray into the private sector for the Trump Administration, after getting a “golden share” in the US-Nippon Steel deal and grabbing a 15% revenue cut from semiconductor exports to China.

Looking ahead: A Barron’s analysis noted that Intel’s long-standing troubles, including massive financial losses, manufacturing setbacks, and a persistent technology gap, might not be able to be solved by government funding alone.

Top colleges are scrambling to fill empty spots

It seems demand for Ivy League diplomas is waning. With fewer students showing up than expected and financial pressures mounting, some elite US universities are rushing to their waitlists just weeks before classes begin.

A student scramble

Institutions like Stanford University and Duke University are extending offers to waitlisted students and demanding swift decisions to finalize their incoming classes:

• Stanford offered spots to waitlisted students, giving them just one week to decide, while Duke added around 50 extra students to its freshman class.

• Rice University in Texas is offering a one-time $2,500 grant to late enrollees to counter costs they might have racked up from committing to other schools.

What’s behind the rush? Reduced federal funding, a 30% decline in international enrollment, and increased competition for students have all sent top colleges looking for alternative revenue streams to maintain their financial stability.

• The lack of international students is set to cost universities around $2.6 billion alone, according to global student recruitment company Shorelight.

Figuring out class sizes isn’t what it used to be: Students are applying to more schools than ever and even holding multiple acceptances while shopping for the best aid packages, consultant Marc Moody told Town & Country.

Catch up on this week’s weird news

 > As part of a 60-year-old tradition, 20-year-old Malorie Thorson sat inside a rotating fridge as her likeness was sculpted into a 90-pound block of butter for the opening of the Minnesota State Fair.

 > A new study found light pollution shifts songbirds’ internal clocks, causing them to start chirping 18 minutes earlier in the morning and 32 minutes later at night.

 > Dubai police stopped an elaborate $25 million pink diamond heist within eight hours, arresting three suspects and recovering the 21-carat gem before it could be smuggled out of the country.

 > A genetic study has revealed Africa is home to four distinct giraffe species rather than one, a discovery that could transform how scientists help protect the animals.

 > CT scans and 3D mapping of a child’s ancient bones found in Israel suggest that humans and Neanderthals may have interacted 100,000 years earlier than previously thought.