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The Big Picture
US Fed defies Trump and unanimously hikes rates. Despite pressure from US President Trump to lower rates, the US central bank raised its federal funds target range by a quarter of a percentage point to 3.75-4%, its first rate hike in three years. Fed Chair Kevin Warsh said inflation has been too high for too long, and another 2026 rate hike appears likely, with 16 of 18 Fed officials projecting at least one more hike this year. The US rate hike makes an Australian rate hike more likely at the RBA’s next rate decision on 29 September. (FT)
Hawkish Fed comments hit US markets. While markets were already predicting a rate hike from Wednesday’s decision, investors sold off as it became apparent there will likely be at least one more rate hike in the next three months. The S&P 500 dropped nearly 1.3% and the Dow Jones fell 1.7% in the hour that followed Warsh’s speech. The ASX welcomed the anti-inflation effort, jumping 1.1% at market open before settling for a 0.3% gain on the day. (CNBC | AFR)
EU invites Canada to become its first associate member. The EU and Canada have tightened their relationship in recent weeks as the Canada-US divorces carries on. No details were shared on what the associate membership would entail, but US President Trump declared it a hostile act and threatened to cut trade to the EU, despite having previously called Canada a horrible trade partner. (ABC | BBC)
$40bn windfall closes out ASX “dividend recession”. ASX investors will receive nearly $40 billion in dividends over the next two months, fueled by strong annual reporting results in August. This comes as welcome news following a so-called dividend recession that saw Australian dividends fall in 2024 and 2025. (AFR)
Creatives fire back against Labor AI copyright reforms. Leaked consultations revealed that Labor’s AI copyright reforms would allow AI labs to train models on copyrighted material without paying creators. The pro-AI move was hammered by creatives, who said creators should be consulted with and paid for their creations to be used for training AI. (ABC)
Companies in the news
OpenAI looks to double valuation in next funding round. Despite their CEO lobbying for an industry-wide slowdown, OpenAI is reportedly chasing a US$1.5 trillion valuation for their next round of funding, which would be more than double their current US$730 billion valuation. CEO Sam Altman announced earlier this week the company would not go public in 2026 as previously promised. (Forbes)
Reliance Worldwide accepts $4.1bn Brookfield buyout. Canadian asset manager Brookfield will take the Australian plumbing giant private after three earlier attempts. Reliance has been given a “go shop” provision wherein they are allowed to go to market and try to find a better deal. (Reuters)
Revolut customer data held for ransom after data breach. Europe’s largest fintech has found itself in hot water after hackers stole hundreds of confidential customer records. The hackers demanded US$3 million in 24 hours or else they would sell the customer data, which was obtained via a compromised Italian government email system. (FT)
Big Bash-inspired surf league splashes cash for talent. The Surfing Super League is offering $89,000 to each of the 48 surfers competing in its 8-week competition in an effort to replicate the success of cricket’s Big Bash League and make professional surfing more lucrative for athletes and investors alike. (AFR)
Dabble cops $1m fine after sending 839 texts to self-excluders. The sports betting platform was fined by the Australian Communications and Media Authority for a variety of self-exclusion breaches, including failing to close accounts registered with BetStop, the national self-exclusion register. (ACMA)
Google seems to have created the Matrix, and people are using it to… parallel park?
Fruit flies may not have the most complex brains on earth, but mapping them is difficult nonetheless. Google managed to do so, and seems to have created the closest thing to the Matrix we’ve ever seen.
Using Google’s map of a fruit fly’s 166,000 neurons, creative engineers have trained the digital brain to do everything from solve a Rubik’s cube to parallel park a car in a digital world. Mark Unthank, the developer who trained the parking brain, said “That’s how easy it is. Even a fly could do it.” Thanks Mark, but it’s still pretty hard for me. (NYT)
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Ask An Adviser: Super insurance
We asked financial adviser Phil Thompson from Skye Wealth what he thinks about insurance offered by your super fund.
Is my default insurance cover in super any good?
Phil: Good is subjective, and for most, default cover isn't good, it's mediocre. On average, a 30-year-old parent needs around $561,000 of life cover and $874,000 of TPD, yet the average life payout from default super cover last year was about $142,000. Not even a fraction of the need.
Look, it's genuinely great that as Australians we get some cover by default. What's not great is assuming it's all we need, or all we can access, when retail policies offer features super just can't touch, like own occupation TPD assessed against your actual job, trauma cover, and knowing what you can and can't claim on from day one.
My belief is that personalised retail cover is where you build the cover you actually need, but it's your choice which path to go down. We've put a comparison up at savings.skye.com.au breaking down each super fund versus direct, like for like, based on the cover our clients have been recommended.
Want to work with an adviser like Phil to sort out your super insurance? Fill out the form on our website and we’ll match you with one of our hand-picked advisers to help you get started.
