The US Federal Reserve on Tuesday inched closer to fresh steps to bolster a sluggish US recovery, saying it stood ready to provide more support for the economy and expressing stronger concerns about low inflation.
The Fed’s policy-setting panel opened the door wider to pumping hundreds of billions of new dollars into the economy, although it made no policy shift at the end of a one-day meeting, keeping overnight interest rates near zero.
“The committee ... is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” it said in a statement.
After its last meeting on Aug. 10, the Federal Open Market Committee (FOMC) had simply said it would “employ its policy tools as necessary.”
“The FOMC now has a very explicit easing bias,” JPMorgan economist Michael Feroli wrote in a note to clients. “The Fed is now admitting that they are not hitting the inflation mandate, clearly not hitting the employment mandate and — with subpar growth forecasted for the near term — not even moving in the right direction.”
The Fed underscored its concerns over easing price pressures in its statement by explicitly stating for the first time that core inflation was running below levels at which policymakers are comfortable.
“With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time,” it said.
US Treasury debt prices surged after the statement, with the yield on the two-year note hitting a series of record lows, and the US dollar fell sharply as investors speculated about further easing as soon as the Fed’s next meeting on Nov. 2 to Nov. 3.
Gold prices, which have jumped about 17 percent this year on concerns that efforts to prop up the US economy will fuel inflation, set a fresh record high.
On Wall Street, US stock prices ended flat to lower in an erratic session.
“The Federal Reserve has taken another step, albeit a half step, in recognizing the unusually sluggish economic and employment outlook and related need for additional policy measures,” said Mohamed El-Erian, co-chief investment officer at bond fund PIMCO.
Kansas City Federal Reserve Bank President Thomas Hoenig dissented for a sixth consecutive time, reiterating his view that the Fed could allow its balance sheet to shrink and that a vow — repeated on Tuesday — to keep borrowing costs exceptionally low for an extended period was no longer warranted.
After cutting the overnight federal funds rate to near zero in December 2008, the Fed launched an asset-buying program in a further effort to lower borrowing costs and help the economy.
In the end, it bought US$1.7 trillion in longer-term US government debt and mortgage-related bonds. Restarting large-scale purchases of government bonds is the Fed’s most likely next step.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
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