One of the US Federal Reserve’s most hawkish officials confronted one of the institution’s most dovish policymakers on Tuesday in a rare joint public debate over the risks posed to inflation by the US central bank’s bold steps to spur growth.
Policy dove Charles Evans, president of the Federal Reserve Bank of Chicago, and anti-inflation hawk Jeffrey Lacker, chief of the Richmond Fed, sparred pointedly and respectfully disagreed.
Evans stressed that the Fed was still “missing tremendously” on the employment side of its dual mandate, while its other charge, inflation, was well under its 2 percent goal.
“Our credibility will be judged by how we do on both sides of the mandate,” he told a dinner event hosted by Virginia Commonwealth University.
The Fed opted at its last month’s meeting to keep buying bonds at a monthly US$85 billion pace, while vowing to hold interest rates near zero until unemployment hit 6.5 percent, provided inflation remained under 2.5 percent.
The jobless rate in February was a lofty 7.7 percent and data due tomorrow is expected to show that it remained at that level last month, while firms added 200,000 new jobs as the economy picked up steam.
Evans, a voting member of the policy-setting committee this year, was the key Fed leader who advocated for introducing thresholds for unemployment and inflation to guide expectations about how long it would hold rates near zero.
He said that recent payroll reports had been very positive and the economy looked like it would achieve “escape velocity” next year of 3.5 percent growth.
However, Evans sounded a note of caution over swiftly scaling back the Fed’s bond buying, and said that he wanted to see month-after-month of plus-200,000 new jobs created to be assured the labor market was on a durable upswing.
“At some point we will reduce the flow rate and end this program. But it could well be later in the year, or whatever. We’re just going to have to look at the data and see how things play out,” he said, while also stressing inflation was under control.
In contrast, Lacker, a hardline hawk who dissented at every policy meeting last year, cited hard lessons from history of what happened when the Fed allowed inflation to get out of hand.
“I’m not confident we can dial up expected inflation ... and then dial it down,” Lacker told the dinner audience.
He also voiced concern the central bank would be willing to exit from its policy actions in time, and that a delay would sow the seeds of future inflation.
“I see upside risks starting year and half, two years from now,” he said.
They were introduced by former Richmond Fed president Alfred Broaddus, who described them as the closest things to polar opposites on the Fed’s policy committee as possible to find.
In separate remarks, Dennis Lockhart, president of the Atlanta Fed, said he expects the US economy to expand a bit over 2 percent this year, though he does see some chance that the expansion could prove even stronger.
At the same time, Lockhart flagged short-term budget cuts from Washington as a risk to near-term economic performance.
He also noted the US labor market, while better, remains only a shadow of its pre-recession self.
“Conditions in the broad labor market are quite mixed,” he told an audience in Birmingham, Alabama, adding that he was still cautious about recent signs of economic strength.
A fourth Fed official, Minneapolis Fed President Narayana Kocherlakota, also spoke on Tuesday and reiterated his view that Fed policy was still too tight and ought to be eased further.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained