The US economy will probably start picking up in the second quarter, toward an annual rate of about 3 percent, but it may not be clear for some time whether the world’s largest economy is on a sustained path, a top official at the US Federal Reserve said yesterday.
“It may not be clear for several months, or even quarters, whether the US economy is undeniably on a stronger and sustained growth path around a run rate of 3 percent,” Dennis Lockhart, president of the US Federal Reserve Bank of Atlanta, told a business gathering in Dubai in a prepared speech.
Lockhart, who said he was speaking in his personal capacity, does not have a vote this year on the Fed’s policy-setting board, but he participates in its discussions.
He is considered to be near the center of the central bank’s policy spectrum and his comments often reflect the views of the core decisionmakers.
The Fed has kept overnight interest rates near zero since late 2008 to help the US economy recover from a deep recession.
Signs of recovery in the US jobs market led the Fed to start winding down its bond-buying program, which is aimed at pushing down borrowing costs.
However, dissatisfied with the US recovery, the Fed is still adding US$45 billion in bonds each month, though the purchases should end later this year.
“I expect this program to be completely phased out by October or December this year,” Lockhart said.
At its last policy meeting on April 30, the Fed stuck to its assessment that the economy would need near-zero interest rates for a “considerable time” after the asset purchases ends.
“Based on my outlook, I think that conditions in the US economy will justify beginning the process of raising rates in the latter half of 2015. Once rates begin to rise, I expect the process to normalization of interest rates to be gradual,” Lockhart said.
Inflation has been running just above 1 percent in the world’s biggest economy while unemployment, albeit falling, is still elevated at 6.3 percent.
Lockhart said that he expected inflation to firm to a healthier rate over the medium term on a track to the Federal Open Market Committee’s 2 percent target.
He also said that despite the decline in the unemployment rate last month, the US apparently added jobs, but lost workers.
“So I am hesitant to take on board this decline in the unemployment rate as indisputable evidence of progress toward full employment,” he said.
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
PARTNERSHIPS: TSMC said it has been working with multiple memorychip makers for more than two years to provide a full spectrum of solutions to address AI demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it has been collaborating with multiple memorychip makers in high-bandwidth memory (HBM) used in artificial intelligence (AI) applications for more than two years, refuting South Korean media report's about an unprecedented partnership with Samsung Electronics Co. As Samsung is competing with TSMC for a bigger foundry business, any cooperation between the two technology heavyweights would catch the eyes of investors and experts in the semiconductor industry. “We have been working with memory partners, including Micron, Samsung Memory and SK Hynix, on HBM solutions for more than two years, aiming to advance 3D integrated circuit
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS