The daily business briefing: March 22, 2023

Google released its chatbot, Bard, on Tuesday, joining the push into new applications for artificial intelligence energized recently by Microsoft and startup OpenAI projects. Google is making Bard available to a limited number of users in the United States and Britain, then expanding access gradually, executives told The New York Times. Google needs to keep up in the AI race to protect its lucrative dominance in internet search, although it's not integrating Bard into its search engine yet. Google is taking a cautious approach after OpenAI's technology stimulated intense interest but faced criticism after reviewers reported unpredictable and occasionally incorrect responses to requests for information. 

Sales of previously owned homes jumped 14.5 percent in February compared to a month earlier, according to a seasonally adjusted count released Tuesday by the National Association of Realtors. The monthly increase was the first in 12 months and the biggest since July 2020, early in the coronavirus pandemic. Still, sales were down 22.6 percent from February 2022, before Federal Reserve interest rate hikes pushed mortgage rates higher. Since the sales figures reflect closings, the February data probably reflected contracts signed in late December and January, when mortgage rates fell to about 6 percent after reaching a high of 7 percent in the fall. Sales got a boost from the first year-over-year decline in home prices in a decade.

The Federal Reserve wraps up a two-day meeting on Wednesday with its next move on interest rates "unusually unclear," Bloomberg reported. Most economists expect a quarter-point interest rate hike, continuing the central bank's campaign to raise rates to slow the economy and bring down high inflation. But some say policy makers might pause to promote financial stability as a banking crisis threatens to spread. "Have they gone too far, or not far enough? Both could be true at the same time," said Derek Tang, an economist at LH Meyer/Monetary Policy Analytics in Washington. The Fed also will update its rate projections for the first time since December. U.S. stocks surged Tuesday but futures edged lower early Wednesday ahead of the decision.

The Biden administration on Tuesday released tax regulations to implement a 25 percent investment tax credit for U.S.-based semiconductor manufacturing aiming to make it harder for companies that get funds to expand operations in China. Congress passed legislation last year creating the tax credit and subsidies to help make domestic chip makers more competitive after a shortage of computer chips hampered businesses earlier in the coronavirus pandemic. Lawmakers estimated the investment tax credit would cost $24 billion before it expires after 2026. Treasury Secretary Janet Yellen said the regulations equip "taxpayers with the clarity and certainty they need to make investments that will increase semiconductor manufacturing and strengthen America's semiconductor supply chain."

Treasury Secretary Janet Yellen said Tuesday that she would take more action to prop up small banks if necessary as the Biden administration continued to reassure the public about the stability of the financial system after two midsize-bank failures. Yellen said steps the administration and regulators had taken were boosting confidence, but more action could be needed to safeguard the banking sector in general. "Our intervention was necessary to protect the broader U.S. banking system," Yellen said in remarks before the American Bankers Association, the leading industry lobbying group. "And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion."