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Economy

The Fed still doesn’t want to cut rates

So much for lower interest rates by summer. After the less-than-optimal news that the Fed would not cut rates last week (even after a rather encouraging inflation report), a group of Federal Reserve officials reiterated on Tuesday the need for evidence of cooling inflation before rates go down.

For its seventh straight meeting, the Fed kept interest rates fixed at a 23-year high of 5.25%–5.5%. If the economy develops as expected, Fed Governor Adriana Kugler stated that rate reductions will probably be warranted "sometime later this year."

• The Fed is predicting just one rate cut before the end of the year, down from its earlier expectation of two, with no elaboration on when or if it could happen.

• Fed chair Jerome Powell stated that “inflation has eased substantially…but is still too high” to start cutting rates.

Unexpected, yet expected

After the most recent consumer price index (CPI) report unveiled slightly lower inflation numbers and prices showed the lowest increase since July 2022, the Fed still isn’t convinced its policy is doing enough.

• The CPI, a measure of price changes for goods and services, only saw a 3.3% increase from last year and no monthly change in May, coming in below what Wall Street expected.

• Housing prices are up 5.4% on the year and energy costs rose to 3.7%.

• Gas prices are still up 2.2% on the year, and grocery prices remained the same.

According to CME Group, interest rate futures rose nearly 20% to a 71% chance that the Fed would implement at least one rate cut before October, although this was before the Fed dropped the news.

Mohamed El-Erian from the Financial Times argued that bankers need to cut rates soon or they risk unnecessary harm to the economy, especially regarding its financial stability and growth prospects for the near future.

It has had a ripple effect: High mortgage rates are holding up the housing market, likely due to high interest rates, according to Investopedia. The Wells Fargo Housing Market Index, which measures how builders assess business conditions, fell to its lowest level since last December.

Health

The DOJ find digital ADHD company guilty of fraud

After a massive investigation by the Department of Justice, this telehealth company is going under. Federal authorities at the DOJ found ADHD telehealth company Done Global guilty of obstructing justice after an elaborate plot to sell more medications was unraveled.

Done Global’s founder and head doctor were arrested and charged with fraud after the DOJ accused the telehealth company of using “deceptive” marketing practices and providing easy access to over 40 million prescriptions of ADHD and other stimulant pills.

Problematic practices

The Justice Department claimed that Done Global exploited the pandemic to plan and execute a $100 million scheme in which they restricted access of patient data to clinicians and directed them to prescribe medication “for no legitimate medical purpose”.

• The company only paid doctors based on how many prescriptions they could sell, and refused to pay practitioners for medical visits or time spent caring for patients.

• Both the founder and head doctor of the company were aware patients had overdosed and died, yet continued the same practices, according to court documents.

How was this allowed? A law that required patients to meet doctors in person to get a prescription was put on hold by the US government during the pandemic, which allowed for easy delivery of stimulants like Adderall by Done and other telehealth companies.

Capitalizing on a vulnerable market

In an age where everyone (especially young people) are chronically online, it is easier than ever to get information regarding mental health and medication… although a lot of it isn’t reliable or accurate.

• According to a 2022 article by Vox, prescriptions of Adderall and its generic equivalents for 22-44-year-olds saw a 25% increase between 2020 and 2021.

  • Health experts attributed the increase to the “emergence of digital mental health platforms.”

• Hashtags on TikTok for “ADHD” and “ADHDTikTok” saw a combined 18 billion views during the same period.

Although it may be helpful for those with ADHD and other mental disorders to find support on digital platforms, misinformation, whether on purpose or accidental, can lead to teens and young adults misdiagnosing themselves.

• This, in turn, lead them to go to telehealth companies, like Done Global, where they can easily get a prescription in a timely and convenient manner.

Young people aren’t the only ones: Adderall prescriptions for adults jumped 32% for non-stimulant ADHD prescriptions and 10% for stimulant ADHD medications.

Social media may soon have a warning label

After over a decade of scrutiny, social media might be getting a warning label. In a NYT op-ed, the US Surgeon General is calling for warning labels to be put on social media apps this week, similar to those for tobacco and alcohol.

Mounting concerns

After years of seeing worrying data regarding teens and social media use, Surgeon General Dr. Vivek Murthy is yet again imploring policymakers to do something about it.

• In support of his claims, Murthy cited a 2019 study that revealed young people who scroll for more than three hours a day had twice as much risk of depression as those who don't.

• Murthy also referenced a 2023 Gallup poll that revealed US teens spend an average of 4.8 hours a day on social media.

• The Surgeon General also mentioned a survey done by the Boston Children’s Digital Wellness Lab, which showed that almost half of all young people feel worse about their bodies due to social media.

Since a Surgeon General’s warning requires legislation from Congress, he asked them to pass measures (which already have bipartisan support) that would help solve the issue:

• The measures would limit the usage of social networking sites by children, prevent them from providing sensitive information to these platforms, and place restrictions on features like autoplay, push notifications, and endless scrolling.

• They would also make it mandatory for social media firms to submit to independent safety audits and to be open about the impact of their platform on mental health.

Some progress has already been made

The New York governor's signature is still pending on a newly passed bill that would outlaw the sharing of information from adolescents by businesses and the use of algorithms in social media.

Since March 2023, laws have been passed in Florida and Utah raising the legal age to own a social media account. Additionally, Meta has already been sued by more than 40 states, claiming that the company deliberately aims to make children dependent on its services.

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Grab Bag

Could this be the turning point for nuclear energy?

A new type of nuclear reactor is hitting the midwest, and it could be a pretty big deal. TerraPower, a company created by Microsoft co-founder Bill Gates, broke ground for construction of its first commercial reactor last week in Wyoming. His hope is to bring in a new age of clean energy that is scalable and effective, unlike many current methods.

TerraPower wants to create the first sodium-cooled, power-generating reactor in the US with its Natrium reactor. The US has only built two nuclear reactors in the last three decades, however, this one is vastly different than the nuclear power plants you and I are used to…

…it’s an entirely different deal

TerraPower is building what’s called a small modular nuclear reactor, which is much smaller, cheaper, faster, and easier to construct than traditional reactors, which are typically phased out early due to financial issues and complex construction. That shouldn’t be a problem here:

• Gates, who is currently the seventh richest person in the world, has already poured a billion of his own money into the project, and is expecting to dump even more into it.

  • The company has also been awarded and raised over $3 billion to help with production.

• TerraPower’s new reactor will use liquid sodium instead of water for cooling, which allows it to operate at much lower pressures.

  • In an emergency, the reactor can simply be cooled with air vents instead of complex pump systems like the ones traditional reactors use.

• Plus, once finished, TerraPower’s reactor should be half as expensive to produce electricity than a normal nuclear power plant.

Gates says he has absolutely no financial incentive in building the reactor, saying in an interview, "I’m involved in TerraPower because we need to build a lot of these reactors,” and that he will “absorb [the] financial risk.”

The company is expecting the reactor to be finished by 2030, and marks the first time a US powerplant has been developed by a company in decades. Gates also said it has bipartisan support and should remain operational regardless of the balance of power in Washington.

There are a few caveats: The unique engineering project still needs to be approved by the Nuclear Regulatory Commission, and since the reactor is so novel, there could be unforeseen issues with development.

MacDons is getting rid of its AI ordering system

McDonalds sent its AI to wherever they sent Grimace… and I don’t want to know where. The fast food giant announced this week that it will be getting rid of its AI ordering system it tested at over 100 drive-thru locations, along with its partnership with IBM on an automatic order taker (AOT)… at least for now.

McDonald’s stressed that “a voice ordering solution for drive-thru will be part of our restaurants’ future,” and that it “see[s] tremendous opportunity” in the AI technology going forward despite many customers reporting errors with the tech:

• One customer filmed the AI decorating their ice cream with bacon.

• Another customer was asked repeatedly if they would like hot fudge, after insisting they did not.

• Not sure what it is with ice cream, but one TikTok user recorded their water and ice cream being mistaken for butter and ketchup.

• Another TikTok user, who happened to be a former corporate chef at McDonalds, described how the debut of the AI tech at a worldwide convention was allegedly a disaster.

Super fast fast food

Despite the AI going viral for its constant fails, and other artificial intelligence mishaps in the tech space, the fast food industry still wants to keep it around.

• Following the success of its robot cashiers, which reduced average order times at one location by 22 seconds, Wendy's is aiming to extend its AI cooperation with Google Cloud.

• According to Bloomberg, McDonald's and Google are collaborating to use the AI chatbot "Ask Pickles" to direct staff members through tasks.

This hasn’t been McDonald’s first time automating human tasks: The company has also tested things like drone deliveries, kitchen robots, and… AI hiring tools?

Fast Facts

Alien Object: Another mysterious monolith appeared in the Las Vegas desert this week, almost identical to the ones found across the US in 2020.

Cash Cow: Nvidia passed Microsoft on Tuesday to become the world’s most valuable public company, topping $3.3 trillion in market cap. Hope you invested early.

Trippy Chocolate: The FDA warned consumers about Diamond Shruumz-brand Microdosing Chocolate Bars, which have been linked to severe illnesses in eight people across four states.

Mammal Monologue: Bottlenose dolphins have been observed calling each other by “names,” and as of this month, elephants have too.

Sun-Kissed: Here’s some popular myths about sunscreen you probably didn’t know.