Daily Brief - 26 Jan 2024

Yellen says Americans seeing inflation ‘well under control’

Treasury Secretary Janet Yellen shared some positive updates on the US economy. She announced that inflation is now under control, a relief after the pandemic's impact. Surprisingly, the economy grew by 3.3% in the last quarter while inflation stayed at 2%, meeting the Federal Reserve's target. Americans are also seeing their wages grow faster than inflation, which means they are financially better off. Yellen also hinted at a possible increase in productivity, which is great for economic growth without adding to inflation. She remains cautious, though, about the long-term trend of productivity and the impact of high interest rates on national debt.

China's new plan is ‘focused financial boost’ for key sectors

The People’s Bank of China (PBOC), has outlined a plan to support important parts of its economy. They're shifting from general measures to more specific ones, like guiding money to crucial sectors. This includes using less frequent reserve requirement ratio (RRR) cuts and focusing on particular areas for credit support. The PBOC will also establish a new department to boost financing in technology, green initiatives, and other key sectors. This move aims to help the economy recover from various challenges, including a real estate downturn and stock market issues. The strategy marks a significant change from their previous broad approach, now targeting more precise economic support.

Intel faced sharp decline in stock value after gloomy forecast

Intel, faced a sharp decline in its stock value after announcing a weaker-than-expected financial forecast. They predicted lower sales and profits for the first quarter, which was below what analysts had estimated. Despite some recovery in the personal computer business, demand for data center chips is falling. Intel's CEO, Pat Gelsinger, remains hopeful for improvement throughout 2024, emphasizing efforts to advance in chip manufacturing. The company is also trying to expand into making chips for other businesses but hasn't yet secured big customers. Additionally, Intel faces increased competition in the server market and challenges in its autonomous driving division.