US Treasury Secretary Timothy Geithner said on Friday that US President Barack Obama’s administration will oppose any effort in Congress to strip the US Federal Reserve of its legal mandate to pursue low unemployment.
Some conservative Republicans have said the central bank should just concentrate on keeping inflation low and abandon its current dual goals of pursuing low inflation and low unemployment.
Geithner, in an interview with Bloomberg Television, said that the Fed’s dual mandate has served the country very well over time and the administration was opposed to changing it.
Geithner also warned Republicans about politicizing the Fed. A number of conservative economists and Republicans in Congress have attacked the central bank for its decision to launch a new round of US$600 billion in purchases of Treasury securities as a way to lower long-term interest rates. They warn this effort runs the risk of weakening the value of the US dollar and setting off higher inflation down the road.
Asked about this criticism, Geithner said: “It is very important to keep politics out of monetary policy, as Congress recognized when it established the Fed.”
Geithner said it was essential that policymakers “respect and honor what the Congress did when it set up our independent central bank with a mandate to keep prices low and stable over time and to make sure ... they are promoting sustainable economic growth.”
Republican Representative Mike Pence, a chief sponsor of legislation on changing the Fed’s mandate, said this week that he believed it was time to return the central bank to a single mission of “protecting the fundamental strength and integrity of the American dollar.”
Pence said at a news -conference that the Fed had made a mistake in launching a new round of bond purchases. He said this effort would “do nothing more than dilute the value of the dollar and further disrupt the global financial system.”
Fed officials have said they believe the Fed’s dual mandate of pursuing stable prices and low unemployment was proper.
Other nations, including China and Germany, have been critical of the Fed’s bond-buying move, arguing that it would weaken the value of the US dollar against their currencies, hurting the ability of their companies to export.
China’s criticism came at the same time that the administration is urging Beijing to allow the Chinese currency to rise in value.
US manufacturers argue that the yuan is undervalued by as much as 40 percent, giving Chinese manufacturers a competitive advantage against US companies.
Geithner said he did not believe the Fed’s bond buying had hurt the administration’s efforts to get the Chinese to revalue their currency. He said the last time China allowed its currency to appreciate, it increased in value by about 20 percent against the US dollar over a two-year period ending in 2008.
“They did that then too because they recognized it was important to their capacity to grow in the future,” Geithner said. “So I am very confident they are going to let it move. We just want to make sure they keep moving.”
CHIP HANG-UP: Surging memorychip prices would deal a blow to smartphone sales this year, potentially hindering one of MediaTek’s biggest sources of revenue MediaTek Inc (聯發科), the world’s biggest smartphone chip designer, yesterday said its new artificial intelligence (AI) chips used in data centers are to account for 20 percent of its total revenue next year, as cloud service providers race to deploy AI infrastructure to meet voracious demand. MediaTek is believed to be developing tensor processing units for Google, which are used in AI applications. While it did not confirm such reports, MediaTek said its new application-specific IC (ASIC) business would be a new growth engine for the company. It again hiked its forecast for the addressable ASIC market to US$70 billion by 2028, compared
MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it plans to double investment in data center-related technologies, including advanced packaging and high-speed interconnect technologies, to broaden the new business’ customer and service portfolios. The chip designer is redirecting its resources to data centers, mainly designing application-specific integrated circuits (ASIC) with artificial intelligence (AI) capabilities for cloud service providers. The data center business is forecast to lead growth in the next three years and become the company’s second-biggest revenue source, replacing chips used in smart devices, MediaTek president Joe Chen (陳冠州) told a media event in Taipei. “Three or four years
Until US President Donald Trump’s return a year ago, when the EU talked about cutting economic dependency on foreign powers — it was understood to mean China, but now Brussels has US tech in its sights. As Trump ramps up his threats — from strong-arming Europe on trade to pushing to seize Greenland — concern has grown that the unpredictable leader could, should he so wish, plunge the bloc into digital darkness. Since Trump’s Greenland climbdown, top officials have stepped up warnings that the EU is dangerously exposed to geopolitical shocks and must work toward strategic independence — in defense, energy and
Motorists ride past a mural along a street in Varanasi, India, yesterday.
RSS