✅ The Fed's Getting It Right Says...?

Good morning. US stock futures rose in Friday morning trading as Wall Street digested earnings reports from tech giants.

🏦 IMF head: US Fed moving in right direction 

📝 Our report: Kristalina Georgieva, the head honcho of the International Monetary Fund, is donning her crystal ball and predicting some interest rate moves from the Federal Reserve. Georgieva said she anticipates that the Federal Reserve would begin to cut U.S. interest rates in "a matter of months" but cautioned that there was a risk to the global economy of waiting too long to ease policy.  

 🔑 Key points:

• Georgieva told reporters at IMF headquarters that she thinks the U.S. central bank made the right decision to hold rates steady but remain cautious on declaring victory against inflation.

• At the same time, she said the U.S. economy was poised for a "soft landing," with a strong job market, but "it's not done. We're still 50 feet above the ground and we know that until you land it's not over."

• Georgieva said there was a delicate balance on getting the timing right for beginning to ease rates, adding that keeping them higher for longer than necessary could hurt growth in both the U.S. and emerging market economies.

💡 So what: Timing interest rate cuts is crucial for the Federal Reserve as it directly influences economic activity and inflation levels. The Fed aims to strike a balance between stimulating economic growth and controlling inflation. Cutting rates too early could risk accelerating inflation, while delaying rate cuts too long might dampen economic activity. Therefore, the Federal Reserve has to carefully assess economic indicators and market conditions to make informed decisions about the timing and magnitude of interest rate adjustments.

Friday - US Unemployment Rate

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⚡ Meta to use own chips to speed up AI pace

WHAT: Hold onto your "like" buttons, because Meta Platforms is gearing up to unleash a shiny new custom chip aimed at supporting its artificial intelligence (AI) push. The chip, a second generation of an in-house silicon line Meta announced last year, could help to reduce Meta's dependence on the Nvidia chips that dominate the market and control the spiraling costs associated with running AI workloads as it races to launch AI products.

WHY: The world's biggest social media company has been scrambling to boost its computing capacity for the power-hungry generative AI products it is pushing into apps Facebook, Instagram and WhatsApp and hardware devices like its Ray-Ban smartglasses, spending billions of dollars to amass arsenals of specialized chips and reconfigure data centers to accommodate them.

🧑🏾‍🏭 US manufacturing output tops levels not seen since 2022

WHAT: It seems like the rollercoaster ride of the US manufacturing sector has hit a bump and is looking up, giving the economy a nudge. The January ISM Manufacturing PMI index registered a reading of 49.1 percent, up from 47.1 percent in the month prior and above Wall Street's estimates for a reading of 47.2. While that's lower than the reading of 50 needed to signal expansion in the sector, the reading was the strongest since October 2022.

WHY: The positive read on activity comes a day after Federal Reserve Chair Jerome Powell said the US economy has been expanding at "a solid pace." Powell indicated during the press conference that this gives the central bank more time to keep interest rates higher while waiting for more confirmation on inflation's path downward.

🛑 Indian edtech startup files for bankruptcy in the US

WHAT: Byju's, the Indian education tech wizard, seems to have stumbled into a tricky situation in the land of Chapter 11 bankruptcy proceedings. Its U.S. unit, Byju's Alpha, has found itself in a bit of a financial pickle, listing liabilities somewhere between a billion and a whopping $10 billion. Byju's Alpha unit listed its assets in the range of $500 million to $1 billion, according to a court filing, which showed estimated creditors in the range of 100 to 199.

WHY: The ed-tech company, founded by Byju Raveendran, was one of India's hottest startups, valued at $22 billion in 2022, but has more recently seen lenders initiating bankruptcy proceedings against it. Some of Byju's investors said the company's valuation had fallen to between $1 billion and $3 billion.

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