Bond and Stock Markets Align on Federal Reserve Outlook: Morgan Stanley. Stocks and real yields on 10-year Treasury bonds have once again started moving in opposite directions, reversing the trend earlier this year, according to Morgan Stanley.
The S&P 500 has risen by approximately 17% this year, driven by tech giants benefiting from the AI frenzy. Yields initially plummeted after the collapses of Silicon Valley Bank and Signature Bank in March but have since risen.
The divergence between the bond and stock market expectations for the Fed’s interest rate trajectory caused the unusual pattern. However, recent data indicating a cooling economy has caused yields to slip while strengthening the stock market rally. The future movement of yields remains uncertain given the unclear economic outlook.
China Introduces Regulations for Generative AI Services
China has become one of the first countries to regulate generative artificial intelligence (AI), the technology underlying ChatGPT.
The Cyberspace Administration of China released updated guidelines that will take effect on August 15. The published rules are less strict than the previous draft, indicating China’s recognition of opportunities in the rapidly growing AI industry.
The regulations require generative AI service providers to conduct security reviews and register their algorithms with the government if their services have the potential to mobilize the public. These rules apply to services accessible to the general public in China.
