A serious bout of financial market instability has dramatically changed the debate at the US Federal Reserve from worries about inflation to concerns about the possibility of a recession.
The Fed was widely expected to cut its target yesterday for the federal funds rate, the interest that banks charge each other -- the first time in four years.
Fed Chairman Ben Bernanke, facing his first major test since taking over from Alan Greenspan early last year, has been sending signals that he is prepared "to act as needed" to cushion the impact on the economy from the market turmoil.
A change in the funds rate, now at 5.25 percent, is reflected immediately in banks' prime lending rate, the benchmark for millions of US consumer and business loans. The prime rate is currently at 8.25 percent.
Most economists are predicting that Bernanke and his colleagues will choose to reduce the federal funds rate only by a quarter point, although a few see the chance for a bolder half-point move. But analysts agreed that whatever the Fed was to do yesterday would not likely be the last word on the subject.
Many economists are predicting a string of three or more rate cuts as the central bank works to calm financial markets and keep the worst slump in housing in 16 years from pushing the country into a recession.
In Japan, worries about slower economic growth at home and in the US were likely to keep the Bank of Japan from changing interest rates at a two-day policy board meeting starting yesterday.
US credit woes have rattled global markets and prompted concerns that it would drag on US economic growth and weaken demand for Japanese cars, electronics and other exports. Domestically, there are persistent signs of deflation, with July's core consumer price index falling 0.1 percent, the sixth straight monthly drop.
Last week Tokyo said the economy contracted in the April-June quarter at an annual rate of 1.2 percent, reversing its initial estimate for a 0.5 percent growth.
Japan's finance minister yesterday played down the US' credit problems but urged caution from the Bank of Japan. The bank last raised interest rates in February.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique