US Federal Reserve officials last month held a vibrant debate that pitted the steady US expansion against heightened international risks and reached a broad agreement on a go-slow strategy that reduced the odds of a rate increase in the first half of the year.
“Several expressed the view that a cautious approach to raising rates would be prudent or noted their concern that raising the target range as soon as April would signal a sense of urgency they did not think appropriate,” according to minutes of the US Federal Open Market Committee’s March 15 to March 16 meeting released on Wednesday in Washington.
“In contrast, some other participants indicated that an increase” in the US federal funds rate target range at the April 26 to April 27 meeting “might well be warranted” if economic data came in as expected, the minutes showed.
“A couple” wanted a rate hike at last month’s meeting, including Kansas City Fed President Esther George, who dissented against the decision to keep rates unchanged.
US central bankers last month also lowered their estimate for rate hikes this year to two quarter-point moves from four in December last year, with nine of 17 officials holding that view. The minutes confirmed US Federal Reserve Chair Janet Yellen’s message from her post-meeting news conference and a subsequent New York speech just last week: To assure the expansion stays on track, policy will respond to growth threats as much as it does to actual data.
Investors marked down the probability of a rate increase by the US Federal Open Market Committee’s June meeting following the release of the minutes. The chances are seen now as below 20 percent, according to trading in futures linked to the US federal funds rate.
“Risk management considerations” helped “produce a broad consensus on the Federal Open Market Committee even among people who are more optimistic about growth,” said Laura Rosner, a senior US economist at BNP Paribas in New York. “They’re able to pull together and agree this policy decision was appropriate.”
US Fed officials met as financial markets were recovering from the depths of a selloff early this year that rattled international leaders and boosted US recession risks. The US unemployment rate, at 5 percent last month, is near central bankers’ definition of longer-run full employment, and some inflation indicators are starting to rise. The personal consumption expenditures price index, excluding food and energy, rose 1.7 percent for the year through February. The committee targets inflation of 2 percent, including all items.
The minutes showed committee members considered a number of distinct risks, with a softening outlook for international growth and the ensuing volatility in financial markets chief among them.
“Many participants expressed a view that the global economic and financial situation still posed appreciable downside risks to the domestic economic outlook,” the minutes said.
Data relevant to the US Fed’s thinking “include not only domestic economic releases, but also information about developments abroad and changes in financial conditions.”
US Fed officials said that slowing growth abroad could work as a drag on growth in the US by cutting exports and by reducing investment spending.
“The possible adverse effects on investment spending of concerns about global growth and the associated volatility in financial markets were also noted,” officials said.
The consideration of international conditions in US policymaking gives US Fed officials even more discretion, Jefferies LLC chief financial economist Ward McCarthy said.
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