The US Federal Reserve on Wednesday kept interest rates unchanged and signaled it still plans to raise rates twice this year, although it said slower economic growth would crimp the pace of monetary policy tightening in future years.
However, the central bank’s decision to stick with its rate path for this year appeared shakier, with six of its 17 policymakers projecting just one increase this year. Only one Fed policymaker had done so when economic forecasts were last issued in March.
A sharp slowdown in US hiring last month had fueled doubts about the strength of the labor market going into the Fed’s two-day policy meeting. US Federal Reserve Chair Janet Yellen acknowledged the need to see clear signs of economic strength before lifting rates.
“We do need to make sure that there is sufficient momentum,” Yellen told a news conference.
The Fed also said the US economy would grow only 2 percent this year and next year, 0.1 percentage point lower than previously forecast for each year.
It also cut its longer-term view of the appropriate federal funds rate, its benchmark lending rate, by a quarter point to 3 percent and indicated it would be less aggressive in raising rates after the end of this year.
Yellen was not clear on whether a rate increase could come at the next policy meeting late next month or whether the central bank would wait for a slew of firmer data as it heads into its September meeting.
“I am not comfortable to say it is in the next meeting or two, but it could be,” Yellen said. “It is not impossible that by July, for example, we would see data that led us to believe that we are in a perfectly fine course.”
Yellen said the US economy appeared to have gained momentum since April, but that the labor market has lost some steam.
She said Britain’s possible exit from the EU was one of the factors in the latest rate decision, saying Thursday next week’s referendum would have “consequences for economic and financial conditions in global financial markets.”
Financial markets all but priced out a rate increase this year after the Fed statement and US short-term interest rate futures contracts rose. US stocks closed lower.
In Asia trading, most stock markets sank yesterday, while the yen soared to a 22-month high versus the US dollar as the Bank of Japan refused to pump up its stimulus.
The US central bank’s latest rate decision was unanimous, with Kansas City Fed President Esther George, considered among the policymakers most eager to raise rates, voting with her colleagues on the Federal Open Market Committee (FOMC). George dissented at the prior two meetings.
“This FOMC clearly has little stomach to raise rates,” said Stephen Stanley, an economist at Amherst Pierpont Securities.
The Fed’s benchmark overnight lending rate remains in a range of 0.25 percent to 0.50 percent.
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
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
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
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],”