The US Federal Reserve bade farewell to its acclaimed chairman Alan Greenspan on Tuesday with a 14th successive hike to US interest rates, but left his successor with room to rejig monetary policy.
The final meeting of the Federal Open Market Committee (FOMC) with Greenspan, 79, in the chair agreed to raise the benchmark federal funds rate by a quarter point to 4.5 percent. That is its highest level since mid-May 2001.
The Senate overwhelmingly voted to confirm White House economic adviser and former Fed governor Ben Bernanke, 52, as Greenspan's successor shortly after the FOMC meeting concluded.
PHOTO: AFP
"Although recent economic data have been uneven, the expansion in economic activity appears solid," the FOMC said in a statement.
"The committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance," it said.
That was a softening from the December meeting, when the FOMC said "some further measured policy firming is likely to be needed."
The FOMC dropped the phrase "measured" from its statement to describe future policy action, in a step taken as leaving flexibility for Bernanke.
"The change from `likely' to `may be' takes away any strong signal they'll be raising rates," said Barclays Capital economist Dean Maki.
"If there'd been a strong signal either way, that would have constrained Bernanke," he said, forecasting that the new Fed chairman would stage another hike at his first FOMC meeting on March 28 before calling a pause.
The word "measured" had been interpreted as meaning the Fed was on course for a gradual series of rate increases. By dropping it, Greenspan has given his successor some room for maneuver.
The FOMC statement also said: "Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained."
"Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures," it said.
Greenspan bowed out after more than 18 years in which he has steered the US central bank through economic golden years punctuated by recession and financial crisis.
Tuesday's rate increase was expected by economists, but there was much speculation about what kind of policy prescription Greenspan would leave for Bernanke to inherit.
With the world's biggest economy enjoying a sustained economic expansion, the Fed under Greenspan has been bringing rates back up from historic lows that were put in place to counter a 2001 recession.
The Fed has hinted that the campaign is drawing to a close, and economic data out last Friday showing fourth-quarter growth of just 1.1 percent had led some to speculate the Fed would call a halt sooner rather than later.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group