Fed Rate, Human-Mouse Brains, and Toy Hall of Fame

Good morning, it's Thursday, Sept. 17. The Federal Reserve raised interest rates for the first time since 2023. First time reading? Join millions of insatiably curious readers. Sign up here.

Also in today's Digest: human brain cells in mice (Need To Know), a grieving humpback whale (Sci. & Tech.), the latest unicorn health startup (Bus. & Mkts.), the Toy Hall of Fame (Etc.), and much more. 

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 Need To Know 

Fed Hikes Rates

The Federal Reserve raised interest rates for the first time since 2023 yesterday, announcing a quarter-percentage-point increase in benchmark rates and bringing the range to between 3.75% and 4%. Stocks closed down on the news (S&P 500 -0.5%, Dow -1.2%, Nasdaq -0.0%). See Federal Reserve 101 here.

The rise marks Chair Kevin Warsh’s first effort to combat inflation, which has remained above the bank’s 2% target for over five years. The vote, which was unanimous, came despite calls by President Donald Trump to lower rates or see him end trade with dozens of countries—any with which the US has a deficit, including China, Mexico, Vietnam, and the EU (see map). Instead, the bank signaled the possibility of at least one more rate increase this year.

Long-term Treasury yields had already priced in the expected hike and did not move significantly on the news. See how credit card debt, mortgages, and other household expenses are impacted by yesterday’s decision.

Human-Boosted Mice Brains

Scientists have transplanted lab-grown human brain cells into bioengineered mice, a study revealed yesterday. The advancement may offer a new way to study certain brain disorders and could pave the way for similar tests in larger animals. 

Stanford researchers genetically engineered mice to remove most of their cerebral cortex, the gray matter responsible for reasoning and logic (see a 3D human brain). They then reprogrammed human skin cells into cortical brain tissue to insert into 29 newborn mice. The human cells grew to fill over 90% of the mice’s cortical brain tissue by volume and formed connections with the mice’s nervous systems. Those mice behaved mostly like their nonengineered counterparts except when deprived of oxygen, affecting their ability to walk. Researchers hope the altered mice can be used to test treatments for neurological conditions that are linked to oxygen deprivation in a developing brain, like cerebral palsy. 

To maintain ethical boundaries, scientists concluded the study once the human cells were around six months old—before markers of consciousness emerged.

Canada Eyes Europe

The European Union yesterday invited Canada to become the bloc's first associate member, as both are experiencing tensions with the US. The status has never before existed; terms of the arrangement will be negotiated next month.

Canadian Prime Minister Mark Carney says associate membership could expand trade between Canada and the EU. About 70% of Canadian exports go to the US (visualize here), which imposed 50% tariffs on roughly $20B in goods after talks collapsed last month. The arrangement could also let Canadians live and work in EU countries without visas, while deepening partnerships on Arctic security, critical minerals, AI, defense, and more. Canada recently became the first non-EU country to join a roughly $173B defense program, created partly to reduce reliance on American weapons after the Trump administration reduced support for NATO. 

The proposal comes as new polling shows that four in five Canadians want Canada to be closer to the EU.

 In The Know 

Science & Technology

> Rogue AI agents from OpenAI may have hijacked Hugging Face accounts as early as May 13, nearly two months before a July security breach became public, report finds (More) | Recap the hack in under 3 minutes (More, w/audio) 

> Tyrannosaurus rex teeth suggest the dinosaur was warm-blooded, with a body temperature around 97 degrees Fahrenheit—very similar to humans (More) | What’s the difference between warm-blooded and cold-blooded animals? (More)

> Humpback whale recorded grieving over her stillborn calf for several hours, the first-ever filmed evidence of baleen whales mourning (More) | Watch here (More)

Business & Markets

> US retail sales rose 1.2% to $773.9B in August after a 0.5% dip in July, per Commerce Department; stronger-than-expected consumer spending numbers are the highest since March (More) 

> Intel shares climb 4% amid reports of discussions with SK Hynix to manufacture the Korean company’s memory chips in the US for the first time (More) | Look inside SK Hynix, the world's largest AI memory build out (More via YouTube)

> Thatch, a health benefits platform startup, hits $1B valuation after $108M Series C funding round (More) | Why the cost of covering a family through workplace insurance has tripled over the last 20 years (More)

Politics & World Affairs

> House Speaker Mike Johnson (R, LA-4) adjourns the chamber until after the November midterm elections, precluding a vote planned today on whether to impeach Defense Secretary Pete Hegseth over the Iran war (More)

> Investigation begins into Los Angeles news helicopter that crashed Tuesday, killing the pilot, the reporter on board, and one pedestrian (More) | See the final minutes of the helicopter's livestream (More via X, warning—sensitive)

> Charlie Kirk's family signals intent to sue Utah Valley University, alleging foreseeable failures that resulted in the late conservative leader's death (More) | See previous write-up (More)

See this year’s nominees for the Toy Hall of Fame. (Share)

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Clickbait: Merriam-Webster gets a “glow-up.”

Historybook: US Constitution is signed (1787); Harriet Tubman escapes from slavery for the first time (1849); Actress Anne Bancroft born (1931); Camp David Accords signed providing framework for Egypt-Israel peace treaty (1978); Vanessa Williams becomes first Black woman crowned Miss America (1983).