US Business Newsletter

June 01 - June 30, 2022

Greetings from Consulate General of India,

New York!

Welcome to the June 2022 edition of our newsletter, bringing you important policy and high-impact news.

We hope you find it useful.

Bitcoin Plummets Below $20,000 for First Time Since Late 2020

The price of Bitcoin fell below $20,000 for the first time since December 2020, amid a broader market meltdown driven by rising interest rates, inflation and economic uncertainty spurred by the war in Ukraine. The plunge was accelerated in recent weeks by the collapse of two major cryptocurrency projects, Terra-Lune and Celsius, sowing doubts for the entire cryptocurrency market.

In past downturns, Bitcoin supporters encouraged others to invest while prices were low, or ‘buy the dip.’ But this time, analysis said that the message failed to land and there is no confidence right now.

Another exceptionally strong US jobs report has kept the Federal Reserve on track to deliver a series of interest rate increases this year even as moderating wage growth mitigates the immediate need for aggressive tightening, according to economists. Hiring accelerated more than expected in February as the world’s largest economy added 678,000 jobs, the most since Jul 2021, pulling the unemployment rate down to 3.8 percent. A bigger surprise was the lack of wage growth. Average hourly earnings flatlined last month, following a 0.6 percent jump in January, but were up 5.1 percent over the past 12 months. And the job gains were widespread with strong increases in leisure and hospitality, healthcare, professional and business services, retail, and construction.

U.S. Banks Pass Latest Round of Fed Stress Tests in Sign of Financial Health

The US Federal Reserve gave passing grades to all 33 of the country’s biggest banks in the annual stress tests, which gauged each lender’s ability to weather a severe economic downturn. The banks, which included JPMorgan, Chase, and Goldman Sachs as well as US subsidiaries of foreign banks, had to show they maintained capital levels above the government-mandated minimums after enduring the scenarios outlined by the Fed. The results are an endorsement of the financial strength of the largest US banks, some of which are classified by regulators as systemically important to the economy.

Microsoft Plans to Eliminate Face Analysis Tools in Push for ‘Responsible A.I.’

Acknowledging concerns that facial analysis software, identifying a person’s age, gender, and emotional state, can be biased, unreliable or invasive, Microsoft said that it planned to remove those features from its artificial intelligence service. These changes are part of a push by Microsoft for tighter controls of its AI products, as well as the development of a ‘Responsible AI Standard’ that ensures there is no harmful impact on society.

Biden Orders Emergency Steps to Boost U.S. Solar Production

President Joe Biden ordered emergency measures to boost crucial supplies to U.S. solar manufacturers and declared a two-year tariff exemption on solar panels from Southeast Asia. Using his emergency powers to invoke the Defense Production Act, Biden aims to support American clean energy producers and boost construction and domestic manufacturing of solar power. While many have cheered Biden’s approach to addressing the current crisis of the paralyzed solar supply chain, some have been critical of it, considering it to fall “well short of a durable solar industrial policy”. Now, only time will tell whether Biden’s use of the Defense Production Act is effective in confronting the climate emergency head on.

US Fed’s historic 75 bps hike & what it means for the Indian economy