Fed hikes rates, Canada EU, AI leaders divided (Updated)

Hi, I'm Kim Vinnell in Whanganui, New Zealand. And I'm Christopher Walgesper in Chicago. It's Wednesday, September 16th, today. The Federal Reserve raises interest rates in an effort to tackle inflation, despite President Trump's demands for a cut. Leaders of the AI world split on how the industry should advance. The European Union proposes Canada as its first associate member. And as the end of a UN peacekeeping mission in Israeli-occupied southern Lebanon nears, residents fear for what comes next. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes, 7 days a week. Now, Coach Hank saves up to 25% off grocery store prices. 30 pounds of pasta, 3 cases of protein bars, 75 sports drinks. And that's just pre-game. He knows teamwork, and BJ's knows savings. This is your home, Coach. Home of the Save. Join for just $20 at BJ's.com slash mesquite and save 10 cents per gallon for 6 months. Open soon. Limited time offer, new members only. BJ's. Home of the Save. The U.S. Federal Reserve has raised interest. The quarter percentage point increase brings the benchmark rate to the 3.75 to 4% range. Fed Chair Kevin Walsh supported the decision, acknowledging the need to bring inflation under control. The move comes as President Donald Trump has, since he took office, promised to lower rates and pushed for interest rate cuts, though his economic and foreign policy decisions have largely had the opposite effect. A split is emerging among the most powerful players in artificial intelligence over whether the technology is moving too fast and who is ultimately responsible for keeping it safe. Appearing at a San Francisco tech conference fresh after penning his essay pleading for the industry to pace its advance, Anthropix's Dario Amode reiterated his concerns. AI models get smarter and smarter the more compute you throw into them. And so we had a prediction. We had a prediction of just how capable these models would be. But I think what we didn't appreciate is that it would lead to these companies growing so fast. Open AI's Sam Altman echoing that sentiment. And we have to be willing to pace our development of capabilities such that capabilities always, such that alignment, safety and monitoring are always ahead of capabilities. But one of the other AI giants, meta-founder Mark Zuckerberg, is pushing back. In a social media post, he said, he says an industry-wide slowdown isn't needed and that it's up to the individual companies to ensure their technology is safe, adding that meta already does so. The disagreement comes as concerns grow that AI is advancing faster than humans can keep up with, with some even warning that AI could wipe out humanity in the not-too-distant future. I would like to work with you on opening, opening the door for Canada to being the first associate member of the European Union. Ursula von der Leyen, president of the European Commission, proposing in her State of the Union address that Canada become the EU's first associate member. It would be a new category aimed at deepening ties among ally nations. We will work on energy-critical minerals and batteries on AI, quantum cyber and economic security. This is not a partnership against anyone else, but for our common strength. The move comes as both the EU and Canada face pressure from Trump's trade policies and an assertive China. The proposal caught even EU diplomats off guard. It's unclear if member states will back the plan and trade obstacles remain, including Canada's protected telecom and dairy sectors. Prime Minister Mark Carney says Canada wants, "a unique alliance, not membership." Formal talks are set for October. The US is planning an almost $3 billion weapon sale to Israel. According to an official, the package would include tens of thousands of 2,000-pound bombs, munitions that Israel used in Gaza and Lebanon. The proposed sale has been informally communicated to members of Congress who review major arms transfers. Saudi Arabia now, where Riyadh says it's shot down a Houthi drone near the Muslim holy city of Mecca. The Houthis deny targeting Mecca, calling it Saudi propaganda. Saudi Arabia has launched hundreds of airstrikes in Yemen this week after Houthi fighters attacked Saudi cities and oil infrastructure along the Red Sea. The fighting threatens global energy supplies, Brent crude is hovering near $108 a barrel and key Saudi pipelines remain offline. Saudi Arabia is planning to launch a large-scale missile attack on Saudi Arabia in the coming weeks. It takes time to set up the budget for these forces. And that's what has residents freaked out as the clock ticks with about three and a half months left in UNIFIL's mandate. And Meyer says it's not just UNIFIL's humanitarian role that's at stake. So for the past 20 years, UNIFIL has really been the eyes and ears of the international community. So for that to disappear, for the access that they've been able to grant, not just journalists, but war crimes investigators and others in southern Lebanon, that's another major resource that we're going to lose by the end of this year. Tammy regularly hauls stuff to her kids at college. That's why she shops at BJ's Wholesale Club, saving up to 25% off grocery store prices. Beef jerky, microwave meals, laundry pods, even they can't screw up. Have you met my kids? And with BJ's gas, she gets there for less. They call me the road warrior. This is your home, road warrior mom. Home of the save. Join for just $20 at bjs.com slash mesquite and save 10 cents per gallon for six months. Open soon. BJ. Home of the save. Before we go, I want to flag that a new episode of Reuters Econ World drops today. Host Carmel Crimmins is tackling President Trump's retreat from EVs and what that means for jobs, manufacturing and the fierce competition with China. For more on any of the stories from today, as well as more analysis on the news shaping our world, check out Reuters.com or the Reuters app. There's a link in the description to download it and start getting pure news straight from the source. Don't forget to follow us on your favorite podcast player. If you're listening on a smart speaker, just ask for the latest news from Reuters seven days a week.