US Federal Reserve policymakers are largely united on the need to raise borrowing costs further, minutes from their most recent policy meeting show, despite US President Donald Trump’s view that interest rate hikes have already gone too far.
Every Fed policymaker backed the central bank’s decision last month to raise the target policy rate to between 2 percent and 2.25 percent, according to minutes of the Sept. 25 to Sept. 26 meeting published on Wednesday.
Participants in the Fed’s rate-setting committee also “generally anticipated that further gradual increases” in short-term borrowing costs “would most likely be consistent” with the kind of continued economic expansion, labor market strength, and firm inflation that most of them are anticipating, the minutes showed.
Photo: AP
“This gradual approach would balance the risk of tightening monetary policy too quickly, which could lead to an abrupt slowing in the economy and inflation moving below the Committee’s objective, against the risk of moving too slowly, which could engender inflation persistently above the objective and possibly contribute to a buildup of financial imbalances,” the minutes said.
Trump in August said he was “not thrilled” with Fed Chairman Jerome Powell for raising interest rates, and has since escalated his criticism, this week saying the central bank is his “biggest threat” and last week calling the Fed “crazy,” “loco,” “ridiculous” and “too cute.”
Though the minutes did not refer to any of Trump’s criticism, its message of further rate increases suggests that policymakers are not fazed by it.
“For now, the Fed has made it clear that they are focused on their agenda, despite rising presidential pressure on their rate decisions,” said Mike Loewengart, vice president of investment strategy at E*Trade.
The broadly united front could bolster expectations the central bank would raise rates a fourth time this year in December, but the minutes also show the committee remains split on how much further to raise rates next year.
A few participants expected rates would need to rise enough to modestly restrain economic growth, even as two others “indicated that they would not favor adopting a restrictive policy stance in the absence of clear signs of an overheating economy and rising inflation.”
Fed officials overall expect rates to rise to 3.1 percent next year and 3.4 percent in 2020, just above their 3 percent estimate for the long-run “neutral” rate at which borrowing costs are neither braking nor stimulating economic growth.
Traders of futures contracts tied to the Fed’s policy rate see rates topping out at about 3 percent.
In the minutes, policymakers said estimates of the neutral rate would only be “one among many” factors going into monetary policy decisions.
The Fed has been raising rates since 2015 and after the rate hike last month it stopped describing the stance of monetary policy as “accommodative,” meaning it no longer thought the level of interest rates was stimulating the economy.
The minutes showed that “almost all” policymakers agreed it was time to remove that language.
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],”