The US Federal Reserve is more concerned about deflation than inflation, Wendy Edelberg, a Fed economist, said yesterday at a conference in Beijing. She added that this was her own opinion.
The Fed is “very worried about real interest rates being too high,” she told the Global Think Tanks Summit. The monetary authority “would be thrilled if right now the worry that it had was really inflation, and if it were really worried about seeing signs that the economy was about to be growing much faster than its potential growth rate.”
The Fed refrained on June 25 from lifting its target rate for overnight loans between banks, having kept it at zero to 0.25 percent since Dec. 16. It also kept unchanged the size of its asset-purchase programs after more than doubling the assets on its balance sheet to US$2.1 trillion during the past year, expanding bank reserves and beginning lending programs to bolster the financial system.
The Fed’s balance sheet is already starting to come down as those lending facilities are no longer as “attractive,” Edelberg also said, attempting to ease worries about the Fed’s “‘exit strategy” for its fiscal and monetary stimulus measures. The US economy is still “grim” even if there are stabilizing signs in other economies around the world, she said.
US Treasuries fell this year as the global financial crisis abated and the US government began selling a record amount of debt to fund stimulus spending and bank rescues. The yield on the 10-year note rose in the past two months 35 basis points, or 0.35 percentage point, to 3.5 percent yesterday, according to data compiled by Bloomberg.
Risk premiums, rather than inflationary concerns, have caused recent gains in long-term interest rates, Edelberg said.
“Investors are rediscovering their appetite for risk and they are getting out of Treasuries into other kinds of investments,” she said.
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Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
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