US Federal Reserve Chair Janet Yellen professed her disappointment over not being tapped for a second term by US President Donald Trump, while she also predicted the central bank would keep on its path of gradual interest rate increases.
“I would have liked to serve an additional term and I did make that clear, so I will say I was disappointed not to be reappointed,” she said on PBS NewsHour in a rare television interview on Friday.
“I feel great about the economy,” Yellen said on her last day on the job. “I think things are looking very strong.”
“The Federal Reserve has been on a path of gradual rate increases and if conditions continue as they have been, that process is likely to continue,” she said.
In a break from past practice, Trump opted not to nominate Yellen to a second four-year term. Instead, he chose fellow Republican Jerome Powell to head the central bank. Powell is to be sworn in as chair today at 9am.
Yellen said that gains in the labor market had begun to benefit “almost all groups in the American economy,” and that she expected the pace of wage growth to move up, but perhaps not dramatically.
“Ultimately, wage growth is limited by productivity growth, which is weak,” she said.
During Yellen’s four-year term, unemployment fell from 6.7 percent when she took office to 4.1 percent. Last month’s reading, released on Friday, matched the lowest since 2000 and was less than the level that most economists — including those at the Fed — say is equivalent to full employment.
However, inflation has consistently fallen short of the Fed’s 2 percent objective during Yellen’s tenure and stood at 1.7 percent in December last year, according to the Fed’s favorite price gauge.
Yellen and her fellow policymakers this week said they expect inflation to rise this year and to hit their target “over the medium term.”
Notwithstanding this week’s rout in the stock market, investors have prospered during Yellen’s time atop the central bank. Since she took control in February 2014, the Dow Jones Industrial Average has risen by more than 65 percent.
As Fed chair, Yellen began the process of exiting from the extraordinary measures that the Fed put in place during the financial crisis and its aftermath, gingerly lifting interest rates from near zero percent and slowly scaling back the central bank’s big holdings of bonds.
For Powell, he takes over at a remarkably quiet time following a decade of economic turmoil that forced the central bank into uncharted policy waters to try to recover from the global financial crisis.
Nevertheless, Powell, one of the rare non-economists to fill the role, could soon face difficult policy decisions that would put him at the center of debate over how fast to raise interest rates.
This comes at a time when all major global economies are growing simultaneously, an unusual and happy coincidence, but one that begins to raise concerns about when the recovery could end — and how.
“His biggest challenge will be leading the further calibration of interest rates when the US economy is late cycle amid a synchronized global economic upswing and fiscal stimulus is on its way,” said Kathy Bostjancic, who is director of US Macro Investor Services at Oxford Economics Ltd.
The Fed in December raised the benchmark lending rate for the third time last year and indicated that another three hikes were likely this year.
The first rate increase for this year is widely expected to come in March, which would also feature the first news conference by Powell, who has served on the Fed board since 2012.
“Massive fiscal policy piled on top of an economy that was growing solidly and has limited labor availability has not been tried before,” economist Joel Naroff said. “How this ‘Grand Fiscal Experiment’ affects wage and price inflation is something the Fed has to be worried about.”
Additional reporting by AFP
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
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
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