The US Federal Reserve said on Tuesday the US recovery was gaining traction and inflation pressure from soaring energy costs should be short-lived, allowing it to maintain its heavy support for the economy.
The US central bank decided unanimously to forge ahead with its US$600 billion bond-buying plan despite a considerably more upbeat assessment of the economy and the job market
It made no mention of Japan, which is grappling with the aftermath of the country’s worst -earthquake on record — and struggling desperately to avert a nuclear disaster.
“The economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually,” the Fed said in a post-meeting statement.
It was a much rosier outlook than the Fed had offered after its last meeting in January, when it characterized the recovery as still too weak to significantly bring down unemployment.
The statement also dropped a reference to economic progress being “disappointingly slow” and a list of roadblocks to consumer spending. In addition, it removed a passage stating that employers remained reluctant to hire.
The Fed reiterated a pledge to keep interest rates, currently near zero, at very low levels for an extended period. That puts it at odds with other prominent monetary authorities like the European Central Bank, which has signaled a rate hike could come next month.
The Fed dedicated an unusually large portion of its statement to inflation concerns surrounding a recent spike in energy and food prices. It said it would monitor inflation and expectations for future prices closely, but added that the situation appears to be under control.
“Long-term inflation expectations have remained stable, and measures of underlying inflation have been subdued,” it said.
Higher gasoline costs have created fresh concerns for consumers, with a big hit to confidence this month raising concerns whether a recent spurt in consumer spending can be sustained.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
MAJOR CONTRIBUTOR: Revenue from AI servers made up more than 50 percent of Wistron’s total server revenue in the second quarter, the company said Wistron Corp (緯創) on Tuesday reported a 135.6 percent year-on-year surge in revenue for last month, driven by strong demand for artificial intelligence (AI) servers, with the momentum expected to extend into the third quarter. Revenue last month reached NT$209.18 billion (US$7.2 billion), a record high for June, bringing second-quarter revenue to NT$551.29 billion, a 129.47 percent annual increase, the company said. Revenue in the first half of the year totaled NT$897.77 billion, up 87.36 percent from a year earlier and also a record high for the period, it said. The company remains cautiously optimistic about AI server shipments in the third quarter,
Nvidia Corp CEO Jensen Huang (黃仁勳) on Thursday met with US President Donald Trump at the White House, days before a planned trip to China by the head of the world’s most valuable chipmaker, people familiar with the matter said. Details of what the two men discussed were not immediately available, and the people familiar with the meeting declined to elaborate on the agenda. Spokespeople for the White House had no immediate comment. Nvidia declined to comment. Nvidia’s CEO has been vocal about the need for US companies to access the world’s largest semiconductor market and is a frequent visitor to China.
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