The Biden administration is considering new restrictions on exports of artificial intelligence chips to China, as concerns rise over the power of the technology in the hands of US rivals, according to people familiar with the situation.

The Commerce Department could move as soon as early next month to stop the shipments of chips made by Nvidia and other chip makers to customers in China and other countries of concern without first obtaining a license, the people said. The action would be part of final rules codifying and expanding the export control measures announced in October, some of the people said.

The move could further crimp China’s ability to build its AI capabilities after restrictions last year that cut off the most advanced AI chips made by Nvidia and Advanced Micro Devices. (WSJ - Continue Reading) 

Money markets are giving the Federal Reserve a green light to continue shedding Treasury securities from the massive pile accumulated as part of its pandemic response.

By not rolling over all of its maturing holdings of US government debt, the Fed is forcing the Treasury to borrow more from the investing public. The risk is that the increased borrowing will drain reserves from the banking system to low levels that have caused problems in the past.

So far, that’s not happening. A surge in the quantity of Treasury bills being sold since US lawmakers agreed to suspend the debt limit in early June appears to be finding a home mainly with investors who have vast resources elsewhere. (BBG - Continue Reading) 

Japanese policymakers and business leaders appear far more sanguine about the recent slide in the yen than they were about last year’s intervention-triggering collapse — a sign they see the weakness as temporary.

While the currency is at an almost eight-month low against the dollar and at its weakest against the euro in 15 years, the panic of 2022 doesn’t appear to be coursing through the veins of officials, consumers and company executives yet. Last year, Japan spent $65 billion on direct purchases of the yen to help drag it off a three-decade low versus the greenback.

One key factor is the perception central banks are nearer the end of the global rate hike cycle than the beginning. While it’s still not clear when those like the Federal Reserve will reach stop, that view has helped dampen fears that Japan is peering into the abyss of a yen freefall. (BBG - Continue Reading)