UNITED STATES
Cleveland Fed supports hikes
Federal Reserve Bank of Cleveland President Loretta Mester said a solid jobs report for last month and growing momentum in the US economy underlined her support for continued gradual interest rate increases this year. Mester, who is a voter this year on the policymaking Federal Open Market Committee, said she expects inflation to be “sustainably” at the central bank’s 2 percent target by the end of this year. “We still have an accommodative monetary policy,” she said. “In that environment, we should be moving toward neutral.” The so-called neutral rate of interest is the level at which the Fed’s benchmark would neither boost nor restrict economic growth.
TRADE WAR
Trump divulges Japan talks
The US and Japan have begun discussions on trade, US President Donald Trump said on Friday, adding that Tokyo “knows it’s a big problem” if an agreement cannot be reached. India has also asked to start talks on a trade deal, he said. Trump, who is already challenging China, Mexico, Canada and the EU on trade issues, has expressed displeasure about his country’s large trade deficit with Japan, but had not asked Tokyo to take specific steps to address the imbalance. CNBC on Thursday reported that he told a Wall Street Journal columnist that he might take on trade issues with Japan, causing the US dollar to slip against the yen.
FOOD DELIVERY
Li Ka-shing to join China IPO
Meituan Dianping (美團點評), the Chinese restaurant review and delivery giant, has attracted Hong Kong tycoon Li Ka-shing (李嘉誠) to participate in its initial public offering, which could raise as much as US$4.4 billion, people with knowledge of the matter said. Thomas Lau (劉鑾鴻), chairman of department store operator Lifestyle International Holdings Ltd (利福國際), is also preparing an investment, the people said, without specifying the amounts. Meituan Dianping started taking orders earlier this week.
EUROPEAN UNION
EU says Italian budget viable
A top EU official on Friday said that Italy’s budget plans are going in the right direction, despite calls for a major spending boost by the anti-establishment government in Rome. Italy’s debt stands at a towering 132 percent of GDP, making the country’s debt ratio the second-largest ratio in the eurozone after Greece. However, the government, which brings together the far-right League party and the anti-establishment Five-Star Movement, is under pressure to meet electoral pledges and boost spending instead of slashing its deficit, as was promised by the previous government.
FAST FOOD
Court halts McDonald’s sale
Employees of a McDonald’s in a deprived neighborhood of Marseille, France, on Friday erupted in joy after a court blocked the restaurant’s sale. Residents had joined a months-long campaign to halt the site’s sale by its owner, who says that the outlet — the second-biggest employer in the Saint Barthelemy suburb — is losing money. Employees said that the restaurant is a key part of community life. The court halted the sale to a proposed buyer whose project it deemed unviable, because he had “no experience in the food sector” and insufficient financing.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to