Just as Microsoft Corp’s CEO and other Silicon Valley executives touted artificial intelligence such as ChatGPT to transform their businesses, they announced layoffs of tens of thousands of employees globally. Scrutiny of once high-flying cloud spending by businesses was at the forefront. 

Businesses are “under enormous cost pressure. They need to find ways to do the same things cheaper.” – Alex Karp, CEO of Palantir Technologies 

CHINA: China declared itself open for business in a speech by Vice-Premier Liu He that was broadly welcomed but also raised inflationary fears and left people waiting to see what this would mean for existing tensions with the United States. 

“The growth forecasts now for China is 4.5%. I would not personally be surprised when that would be topped.” – Credit Suisse Chairman Axel Lehmann. 

INFLATION REDUCTION ACT: Dubbed a gamechanger for climate change by IEA head Fatih Birol, the Europeans had plenty to gripe about when it came to America’s Inflation Reduction Act. 

The European Union said it would mobilise state aid and a sovereignty fund to keep firms from moving to the United States. 

“The key question is not China First, US First, Europe First. The key question for all of us is Climate First.” – French economy minister Bruno Le Maire. 

FINANCIAL SERVICES: Global financial institutions are grappling with how to right-size for a slowdown, while dealing with a host of other headwinds. With the threat of inflation still hanging over central banks, financiers are facing demands from regulators for higher capital levels to prepare for a downturn, making some businesses unprofitable. 

Pressure is also increasing on them to finance the global transition to a greener future much faster than they have been doing so far. Other exogenous events such as geopolitics and cybersecurity risks are further complicating matters. Consensus is elusive. 

“We shall stay the course until such a time when we have moved into restrictive territory for long enough so that we can return inflation to 2% in a timely manner.” – Christine Lagarde. 

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