Roaring Inflation Drives Fed on Hawkish Rate Path
In the summer of 2022, inflation in European and American countries is increasing day by day. U.S. inflation hit 9.1% in June, the highest in 41 years. Inflation in the UK also reached 9.1% in May this year. In order to tame the inflation, the Federal Reserve started a new round of interest rate hike cycle. But one of the risks posed by higher rates is an economic slowdown. How to strike a balance between easing inflation and avoiding a recession will be a test for Federal Reserve Chair Jerome Powell.
The status quo of high inflation and low growth is reminiscent of the scenes once witnessed in developed Western countries in the 1970s. At that time, in the face of emerging stagflation, advanced economies adopted policies of sharp interest rate hikes, triggering a series of financial crises in developing economies. Inflation in the United States has accelerated since last spring. In June, the Fed announced a 75 basis points rate hike, the largest rate hike since 1994.
The Establishment of CITIC Financial Holdings Lays out a New Roadmap for China’s Financial Reform
In September 2020, with the State Council authorizing the People’s Bank of China to conduct market access management and organize the implementation of supervision over financial holdings, financial holding companies have entered a new stage of high-quality development. On July 15, 2022, CITIC Financial Holdings, which manages nearly 10 trillion yuan in total assets, held its inaugural meeting in Beijing.
Recently, a reporter from Caijing interviewed Xi Guohua, general manager of CITIC Group and chairman of CITIC Financial Holdings. In the interview, Xi Guohua talked about the future development strategy of CITIC Financial Holdings. He also listed the company’s unique advantages. Financial holding companies are new forms of business and new members of China’s modern financial system. Xi Guohua said that CITIC Financial Holdings is a “pioneer” in financial reform and will explore a beneficial path for the reform and development of China Financial Holdings.
China’s Online Grocer Missfresh is on the Verge of Shutdown
Missfresh, one of China’s giant instant online grocers has been established for nearly eight years, and its listing may be its most successful battle, but it has also become the beginning of many misfortunes for this company in later days. On the day of the listing, the share price of Missfresh plummeted by 25%, which shattered the market’s confidence in the industry.
The listing has added a sense of drama to the fate of Missfresh, but in the eyes of more than a dozen investors and over a dozen employees at all levels, the turning point of the company’s fortunes has come in 2019. Since that year, venture capital funds have stopped investing in Missfresh. Its sales are also surpassed by competitors. However, Missfresh did not stop there. The pandemic together with two large capital injections, and its listing in the United States pushed the company for another three years.
President Biden Signs Bill to Bring Semiconductor Chip Manufacturing Back to the U.S.
On August 9, U.S. President Biden signed the “CHIPS and Science Act”, which means that after nearly three years of gaming, this bill, which is of great significance to the development of the domestic chip manufacturing industry in the United States, officially became law. A number of semiconductor industry veterans believe that this round of action by the United States will accelerate the process of localization of China’s semiconductor industry, and China can also make further arrangements to deal with it. Intel CEO Pat Gelsinger commented that the chip bill may be the most important industrial policy introduced by the United States since World War II, aiming to reverse the trend of the decline in the share of the United States in the global chip manufacturing industry.
The passing of this bill will have a huge impact on the U.S. and even the global semiconductor industry.