The US Federal Reserve on Wednesday held interest rates steady and signaled little appetite to adjust them any time soon, taking heart in continued job gains and economic growth, and the likelihood that weak inflation is to edge higher.
“We think our policy stance is appropriate at the moment. We don’t see a strong case for moving it in either direction,” Fed Chairman Jerome Powell told a news conference following the end of the central bank’s two-day policy meeting.
“I see us on a good path for this year,” he added.
Photo: Reuters
Fed policymakers said that ongoing economic growth, a strong labor market and an eventual rise in inflation were still “the most likely outcomes” as the US expansion nears 10 years.
“The labor market remains strong... Economic activity rose at a solid rate” in the past few weeks, the Fed said in a policy statement a day after US President Donald Trump called on it to cut rates by 1 percentage point and take other steps to stimulate the economy.
The Fed also trimmed the amount of interest it pays banks on excess reserves to 2.35 percent from 2.4 percent in a bid to ensure that its key overnight lending rate — the federal funds rate — remains within the target band.
The chief concern flagged in the policy statement was the “muted” level of inflation, which continues to fall short of the Fed’s 2 percent target.
The statement suggested that the decline in inflation might be more persistent than expected and was no longer to be blamed simply on falling energy prices.
Data showed a measure of underlying inflation running at 1.6 percent, which would be a problem if it meant households and businesses had doubts about the economy’s strength and were less willing to spend and invest.
Powell told reporters that the decline in so-called core inflation was likely mostly due to transient factors and predicted that it would rise back to the 2 percent target.
“If we did see inflation running persistently below [the target], that is something that we would be concerned about and something that we would take into account in setting policy,” he said.
However, for now, the Fed chief said that low inflation allows the central bank to be “patient” in deciding on any further changes to its overnight benchmark lending rate, which it left in a range of 2.25 percent to 2.5 percent.
Last year, the Fed raised rates four times and, as late as December last year, had anticipated further rises in borrowing costs this year.
Early this year it halted its tightening campaign on concerns about weak data in the US and abroad.
Wednesday’s decision was unanimous, a sign that the Fed remains steady in its pledge to keep interest rates unchanged until incoming economic data provide a compelling reason to do otherwise.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
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
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last