Jax Morning Brief — Inflation Hits a Two-Year High, a Fed Official Calls for a Hike, AI's Talent War Heats Up

Jax Morning Brief — Inflation Hits a Two-Year High, a Fed Official Calls for a Hike, AI's Talent War Heats Up

Good morning. It's Friday, June 26th, 2026. This is The Morning Brief. I'm Jenny. ANDREW: And I'm Andrew. JENNY: The Federal Reserve's favorite inflation gauge just hit its highest level in more than two years, and for the first time this cycle, a sitting Fed official is openly calling for a rate hike instead of a cut. ANDREW: And a Nobel Prize winner walked out of Google's AI lab and into Anthropic this week, the latest move in a talent war that is reshaping the whole industry. JENNY: Let's get into it. ANDREW: A quick look at the markets. The S and P 500 closed essentially flat in yesterday's session at about 7,358, down a hundredth of a percent. The Dow edged up about a tenth of a percent to roughly 51,920. And the Nasdaq slipped about half a percent to around 25,360, its fourth straight losing session and the longest streak since February. The pain is concentrated in chip stocks. Apple and Microsoft both raised hardware prices this week, blaming the memory shortage, and a New York Times report that OpenAI may push its public offering into next year added to the jitters. The ten-year Treasury yield is sitting near 4.4 percent, and the thirty-year fixed mortgage rate is tracking around 6.45 percent, according to Mortgage News Daily. ANDREW: Let's start with the number that moved everything. Yesterday the government reported that core inflation, the Fed's preferred measure that strips out food and energy, rose to 3.4 percent in May. That's the highest reading since October 2023. The headline figure, which includes energy, came in even hotter at 4.1 percent, the highest since April 2023. JENNY: So this is the gauge the Fed watches most closely, and it's moving in exactly the wrong direction. ANDREW: Exactly. For most of the past year the conversation was about when the Fed would cut. That conversation is essentially over. After the June meeting, where the Fed held its benchmark rate steady at 3.5 to 3.75 percent, the new projections erased the rate cut they'd been signaling. And now Minneapolis Fed President Neel Kashkari has gone a step further. He told reporters he now expects one rate hike by the end of this year. Back in March, that same official was projecting a cut. JENNY: How unusual is it for a Fed official to say the word hike out loud right now? ANDREW: It's a real marker. Kashkari is the first official in this cycle to flip all the way from a cut to a hike, and his reasoning is the Middle East. He thinks the energy prices pushed up by the Iran conflict aren't going to retreat quickly, and he's not convinced the ceasefire with Iran will hold. So the market is no longer debating cut versus hold. It's debating hold versus hike. JENNY: And the ceasefire he's worried about, where does that stand? ANDREW: It's holding for now. The Strait of Hormuz reopened after the agreement in mid-June, commercial tankers are moving again, and oil has fallen to a four-month low, which is actually helping on the rate side, as we'll get to. But the hard part, negotiating a permanent deal and limits on Iran's nuclear program, is still ahead over the next two months. Kashkari's point is that none of that is guaranteed. JENNY: That's a big shift in just a few weeks. ANDREW: It is. And on a separate front, the Supreme Court closed out its term with a burst of rulings yesterday. By six to three votes, the conservative majority handed the Trump administration major immigration wins, allowing the president to end temporary deportation protections for hundreds of thousands of people from Haiti and Syria, and easing the standard for turning green card holders away at the border. The court also struck down state rules requiring gun owners to get a property owner's permission before carrying a firearm onto their land. JENNY: A lot packed into the final days of the term. ANDREW: As always. And there's one more piece of the inflation picture that hits home, a story we've been tracking. Remember the memory shortage driving up the cost of computer chips? It's now showing up in store prices. Apple and Microsoft both raised hardware prices this week, in some cases by more than 10 percent, and they pointed straight at the cost of memory. JENNY: So the AI boom is literally making laptops and game consoles more expensive. ANDREW: That's the through-line. The same companies racing to build AI data centers are buying up the memory chips, which leaves less for consumer devices and pushes prices up. It's a small but real piece of why that inflation number keeps climbing. Now, here's where it gets interesting for anyone in the housing market. ANDREW: You'd think that with inflation running hot and a Fed official talking about hikes, mortgage rates would be climbing. They're doing the opposite. The thirty-year fixed is around 6.45 percent right now, down from about 6.5 percent earlier in the week and near its lowest in a month. Freddie Mac's weekly survey had it at 6.49 percent. JENNY: So what's pulling rates down when everything else points up? ANDREW: Two things, and neither one is the Fed. Mortgage rates track the ten-year Treasury yield, not the Fed's short-term rate, and that yield has drifted down to about 4.4 percent. Part of that is cheaper oil now that the Strait of Hormuz has reopened, and part of it is routine bond buying as money managers rebalance their portfolios at the end of the quarter. JENNY: But if Kashkari's hike talk catches on, does that window close? ANDREW: That's the risk, and it's the thing to watch. If more officials start sounding like Kashkari, the ten-year yield could back up and these lower mortgage rates could reverse in a hurry. For now, the lower rates are doing some good. The Mortgage Bankers Association reported that applications rose 1 percent last week, with refinancing up 3 percent. Refinancing is now about 41 percent of all activity, the highest share in months. JENNY: Any red flags on the housing side? ANDREW: One the data folks are watching. Foreclosure filings in the first quarter ran about 119,000, up roughly 26 percent from a year ago and a six-year high, and federal changes to FHA servicing rules are squeezing the companies that manage troubled loans. It's not a crisis, but after years of historically low foreclosures, the trend line is worth keeping an eye on. Jenny, the AI desk has been busy. What's happening over there? JENNY: It has, Andrew, and the big story this week isn't a product, it's people. Google is losing some of its most important AI researchers to its rivals. John Jumper, who shared the 2024 Nobel Prize in Chemistry for the AlphaFold protein-folding system, is leaving Google DeepMind after nearly nine years to join Anthropic. And in the same stretch, Noam Shazeer, a co-lead of Google's Gemini models, is headed to OpenAI. ANDREW: Shazeer, isn't he one of the authors of the original paper behind these models? JENNY: He is. He co-wrote Attention Is All You Need, the 2017 paper that introduced the architecture nearly every modern AI system is built on. So these aren't ordinary hires. They're foundational figures, and they're walking out the door at the same time. ANDREW: Why does that matter beyond inside-the-industry gossip? JENNY: Because talent is the scarcest resource in this race, and money follows momentum. After the departures, Alphabet shares fell about 5 to 6 percent, with analysts openly questioning whether DeepMind can hold its position at the frontier. Jumper's specialty, AI for science, also tells you where Anthropic thinks the next big opportunity is. ANDREW: So the smartest people are voting with their feet. JENNY: That's the read. And there's a second AI story that matters for the bottom line. After a year of what people in the industry are calling tokenmaxxing, where companies were encouraged to use as much AI as possible without watching the cost, enterprises are tightening up. The new buzzword is efficiency. CNBC reported that Uber burned through its entire annual AI budget in just four months, and one startup, Lindy, moved all of its traffic off Anthropic's models to a cheaper Chinese alternative because the math stopped working. ANDREW: So the spending free-for-all is ending. JENNY: It's maturing. Buyers want clear return on investment now, and that could slow revenue growth even at the leaders. To put the stakes in perspective, Anthropic is running at about a 47 billion dollar annualized pace, up from roughly 10 billion for all of last year. So these are enormous businesses, but the customers are finally asking what they're getting for the money. ANDREW: And there's the public-offering angle too, isn't there? JENNY: Right. That same caution is showing up on Wall Street. The New York Times reported this week that OpenAI is weighing pushing its public offering into next year, partly because an earlier AI listing stumbled out of the gate. That uncertainty is a big part of what's been dragging chip stocks lower all week. The whole sector is recalibrating at once. JENNY: Closer to home now. Weather-wise, Jacksonville is looking at 91 degrees and hot and humid today, with afternoon thunderstorms likely and about a 70 percent chance of rain, so keep the umbrella handy. JENNY: We've been tracking the Culinary Institute of America's plan to put a campus downtown, and there's a new wrinkle. The institute's board met in mid-June to decide on its Southeast campus, but according to News4Jax, the city's Downtown Investment Authority chief executive, Colin Tarbert, told council members the institute hasn't made any public announcement and appears to want to roll the news out jointly with local partners. ANDREW: Remind me what the city has riding on this. JENNY: A lot. The City Council voted 16 to 2 last month to approve up to 35 million dollars in incentives, timed to that board meeting, and the campus would anchor a 160 million dollar hotel and convention hall project on East Bay Street. So the city has put real money on the table and is now waiting on an announcement that's days overdue, and some council members are getting impatient. ANDREW: That's an uncomfortable place to be sitting after a 35 million dollar vote. JENNY: It is. And speaking of impatient council members, the special committee investigating workplace culture at JEA, the city-owned utility, is due to deliver its final report on Monday, June 30th. The utility's chief executive, Vickie Cavey, testified earlier this week, and she was expected to be the last executive to take questions. So by Monday we should know whether the committee recommends real changes or just delivers criticism. ANDREW: Worth watching after months of testimony. JENNY: One more quick local note. The City Council voted 15 to nothing this week to add 14 more city-owned properties to a list of sites that can be donated to nonprofit builders for affordable housing, spread across the North, Northwest, and Eastside neighborhoods. Small move, but a steady one in a tight housing market. Andrew, bring us home. ANDREW: Before we let you go, one thing to watch this week, and it's local. That JEA report lands Monday, June 30th. After months of testimony about a toxic workplace and questions over uncollected fees, the key thing to look for is whether the committee recommends specific changes, to the utility's charter or its leadership, or whether it stops at criticism. The difference between those two outcomes is the difference between a report that fades and one that reshapes how Jacksonville runs its biggest public asset. JENNY: That's your Morning Brief for Friday. Have a great weekend. ANDREW: We'll see you Monday.

Jax Morning Brief — Fed Pivots Toward a Hike, Apple Raises Prices as Memory Costs Soar

Good morning. It's Thursday, June 25th, 2026. This is The Morning Brief. I'm Jenny. ANDREW: And I'm Andrew. JENNY: The Federal Reserve just did something it hasn't done in this cycle. It penciled out a rate cut for this year entirely, and a majority of officials now say the next move could be up, not down. ANDREW: And Apple raised the price of MacBooks and iPads by more than ten percent this morning, blaming a memory chip shortage that traces straight back to the AI boom. We'll explain why your next laptop is collateral damage from the data center build-out. JENNY: Let's get into it. ANDREW: A quick look at the markets. The S and P 500 finished essentially flat Wednesday at 7,358, down a hundredth of a percent. The Dow added about 72 points to close at 51,921, up a tenth of a percent. The Nasdaq slipped about half a percent to 25,359 — that's its fourth straight losing session, with Apple leading the way down. The ten-year Treasury yield sits at roughly 4.41 percent, and the thirty-year fixed mortgage is tracking around 6.55 percent according to Mortgage News Daily, actually approaching a one-month low. We'll get to why rates are falling even as the Fed turns hawkish. ANDREW: Let's start at the national desk, because the story driving almost everything else this week is the Fed. When we last talked, Kevin Warsh's first meeting as chair was happening live. Now we have the result, and it's a real shift. ANDREW: The Fed held its benchmark rate steady in a range of three and a half to three and three-quarters percent — that part was expected. What surprised people is the projections. Back in March, officials had penciled in at least one cut for this year. That cut is now gone. Nine of the officials see at least one hike this year, and six see at least two. And they revised their inflation forecast sharply higher — PCE inflation up to 3.6 percent for this year, from 2.7. JENNY: Wait, so in three months they went from expecting to cut, to half of them expecting to raise? What changed their minds that fast? ANDREW: Two things, mostly. Inflation has been stickier than they hoped — May's reading was a three-year high, driven a lot by energy. And the new chair, Warsh, made clear he's done with the soft, dovish bias. The committee even stripped out the language that hinted at future cuts. The statement itself got dramatically shorter. This is a Fed signaling it's willing to sit still, or move up, until inflation actually breaks. JENNY: And the market did not love that. ANDREW: It did not. A Bank of America note earlier this week explicitly floated a rate hike, and that helped knock semiconductor stocks and the Nasdaq lower for several days running. When traders price in the possibility that the next move is up, growth stocks get repriced first. The Fed did note the economy is still expanding at a solid pace, with strong business investment and steady job gains — so this isn't a recession warning. It's a Fed that thinks the economy can take the pressure. JENNY: And how is Warsh handling all this differently from his predecessor? You mentioned he's changed the style, not just the substance. ANDREW: He has. Warsh signaled he wants less hand-holding from the Fed — fewer promises about the future, a shorter statement, more room to react to the data as it comes. The upside is flexibility. The downside, for anyone trying to plan, is less certainty about what comes next. Markets had gotten used to a Fed that telegraphed every move months ahead. That era looks like it's over. ANDREW: The other big national thread is more encouraging. The U.S. and Iran signed a memorandum of understanding last week to extend their ceasefire by sixty days and reopen the Strait of Hormuz. And this isn't just on paper now — commercial vessels are actually moving through the strait again. Oil has slid to a four-month low as a result. JENNY: So the thing everyone was terrified about a month ago — oil spiking because the strait was blocked — that's unwinding? ANDREW: For now, yes. Roughly a fifth of the world's oil moves through Hormuz, so when it reopened, the war-risk premium came out of crude. That's good news for drivers, and as we'll get to, it's quietly the reason mortgage rates are drifting down. The catch is the hard part is still ahead — the next sixty days of talks are supposed to settle Iran's nuclear program, and nothing there is resolved. JENNY: Andrew, that memory shortage you teased at the top — that's actually my beat, so let me take it. Because this is the clearest example yet of the AI boom showing up in regular people's wallets. JENNY: This morning Apple raised prices on Macs and iPads by more than ten percent — in some cases by as much as three hundred dollars. And the reason isn't tariffs, and it isn't a factory fire. It's that the price of memory chips — the DRAM and flash storage in every device — spiked as much as 98 percent in a single quarter. The industry is calling it RAMageddon. ANDREW: Ninety-eight percent in one quarter? What's pulling that much memory off the market? JENNY: AI data centers. Memory makers figured out they earn three to ten times more revenue building high-bandwidth memory for AI servers than they do building ordinary memory for laptops and phones. So they redirected their factory capacity toward the AI customers. There's no actual shortage of factories — they've just pointed the production lines at the higher-paying buyer, and consumer devices are left fighting over what's left. ANDREW: So this is the AI build-out literally crowding out the consumer electronics market. JENNY: Exactly. And you can see both sides of it in one day. Apple's stock fell about six percent on the price hike. But Micron, which makes the memory, just posted record results — over 41 billion dollars in revenue for the quarter, up from under 24 the quarter before. One company's pain is the other's windfall. And analysts think memory could climb another roughly 60 percent this quarter, so the iPhone refresh this fall may carry a higher price tag too. ANDREW: That's a genuinely useful way to think about where AI spending actually lands. JENNY: It is. And quickly on the enterprise side — Anthropic rolled out a feature yesterday called Claude Tag, which lets teams pull its Claude assistant directly into their Slack channels to take on tasks and connect to company data. It's a smaller story, but it's part of the same pattern we keep tracking — the AI labs pushing to embed themselves inside the tools businesses already use every day. ANDREW: And OpenAI is pushing on the hardware side of that same race, right? JENNY: It is. OpenAI and Broadcom unveiled a custom inference chip this morning — a piece of silicon designed specifically to run AI models more cheaply at scale. That matters because it's another move by the big labs to stop renting all their computing power and start controlling their own. It also, of course, points even more demand at exactly the memory we were just talking about — which is part of why nobody expects RAMageddon to ease anytime soon. ANDREW: So the same forces raising Apple's prices are the ones these companies are doubling down on. JENNY: That's the loop. Every dollar that flows into AI infrastructure tightens the squeeze on consumer devices a little more. JENNY: Andrew, over to you for home lending — because this is where that falling oil price actually pays off. ANDREW: It does, and this is the interesting tension this week. The Fed just turned hawkish, which you'd think would push borrowing costs up. But mortgage rates are doing the opposite. Mortgage News Daily has the top-tier thirty-year fixed at about 6.55 percent — that's the lowest it's been since mid-May, and it's approaching a one-month low. JENNY: So how does that square? The Fed sounds tougher, but the rate someone actually pays on a house is going down? ANDREW: Because mortgages track the ten-year Treasury, not the Fed's overnight rate directly. And the ten-year is being pulled down by that falling oil price out of the Hormuz reopening, plus some quarter-end buying from big money managers rebalancing their portfolios. Lower oil means a softer inflation outlook in the bond market, and that pushes yields — and mortgage rates — down, even while the Fed talks tough. It's a tug-of-war, and right now the bond market is winning. ANDREW: On demand, the Mortgage Bankers Association reported applications rose one percent last week. Refinancing was up three percent and is now running 17 percent higher than a year ago — refis are back up to about 41 percent of all applications. Purchase activity slipped slightly. So it's homeowners refinancing, more than new buyers, driving the action right now. JENNY: That makes sense — if you bought when rates were near seven, mid-sixes is finally worth a phone call to your lender. ANDREW: That's exactly the math households are running. Jenny, that's it from my desks — what's happening at home in Jacksonville? JENNY: Weather-wise, Jacksonville is looking at a high near 91 degrees and sunny today, with just a 20 percent chance of an afternoon shower or thunderstorm. Classic late-June Florida. JENNY: And the story we've been tracking on the downtown culinary school took a frustrating turn. As we previewed last week, the Culinary Institute of America's board was supposed to decide whether Jacksonville gets its new southeast campus. That decision still hasn't been made public. At a city committee meeting Tuesday, the head of the Downtown Investment Authority told council members the institute hasn't announced anything and appears to be coordinating a joint rollout with local partners. ANDREW: So after the city pledged 35 million dollars in incentives, they're still waiting to hear yes or no? JENNY: Still waiting. The 35 million dollar package passed the council 16 to 2 back in late May, tied to that 160 million dollar hotel and convention hall on East Bay Street, with the school as the anchor tenant. The money's on the table — the institute just hasn't said whether it's taking it. Council members made clear Tuesday they're getting impatient. JENNY: And the JEA investigation reached a milestone. JEA's chief executive, Vickie Cavey, testified Monday before the city council's special committee looking into workplace culture at the utility. She's expected to be the last executive to testify. Council members pressed her on the dismissals of senior leaders and on a canceled lobbying contract, which she said the mayor's office did not influence. ANDREW: And the committee's report is due soon, if I remember. JENNY: By the end of the month — June 30th, so just days away now. After Cavey's testimony, the committee has most of what it's going to get. The question is what the report actually concludes, and whether it goes after policy changes at JEA or stops at criticism. We'll be watching for that next week. JENNY: One last local note for the calendar — Jaguars training camp opens July 29th at the Miller Electric Center, and admission is free, though you do need to register in advance. With the stadium renovation underway, this is the season the team plays at a reduced-capacity EverBank before heading elsewhere in 2027. ANDREW: Before we let you go, one thing to watch this week: that JEA committee report due Monday, June 30th. After months of subpoenas and testimony, this is the document that tells us whether the investigation produces real consequences at the utility or just a stern write-up. Watch whether it recommends specific charter or policy changes — that's the difference between a headline and an actual reform. JENNY: That's your Morning Brief for Thursday. Have a great day. ANDREW: We'll see you tomorrow.

Jax Morning Brief — Wednesday, June 17, 2026

Your Jax Morning Brief for Wednesday, June 17, 2026. National news, Jacksonville local, home lending, and AI.

Jax Morning Brief — Friday, June 12, 2026

Your Jax Morning Brief for Friday, June 12, 2026. National news, Jacksonville local, home lending, and AI.

Jax Morning Brief — Thursday, June 11, 2026

Your Jax Morning Brief for Thursday, June 11, 2026. National news, Jacksonville local, home lending, and AI.