The US Federal Reserve on Wednesday kept interest rates unchanged, but said inflation likely would rise this year, bolstering expectations borrowing costs would continue to climb under incoming central bank boss Jerome Powell.
Citing solid gains in employment, household spending and capital investment, the Fed said it expected the economy to expand at a moderate pace and the labor market to remain strong this year.
“Inflation on a 12-month basis is expected to move up this year and to stabilize” around the Fed’s 2 percent target over the medium term, the central bank said in a statement following a two-day policy meeting, the last under Fed Chair Janet Yellen.
It also said its interest rate setting committee had unanimously selected Powell to succeed Yellen, effective tomorrow. He will be sworn in on Monday
Powell, a Fed governor who has worked closely with Yellen, was nominated by US President Donald Trump and confirmed by the US Senate.
Powell is expected to hew closely to the policies embraced by Yellen, who spearheaded the gradual move away from the near-zero interest rates adopted to nurse the economy back to health and spur job growth after the 2007 to 2009 recession.
Fed policymakers have been encouraged in recent months as the economy picked up speed and the unemployment rate fell to a 17-year low of 4.1 percent.
The Fed, which raised rates three times last year and in December forecast three more hikes for this year, on Wednesday said it expected “further gradual” rate increases would be warranted.
The current target range for the federal funds rate is 1.25 percent to 1.5 percent.
US stocks rose slightly after the Fed statement before paring gains. Short-term interest rate futures showed traders adding slightly to bets the Fed would raise rates three times this year, starting at its meeting next month.
Market-based measures of inflation have increased in recent months, the bank said.
The statement did not address the likely impact of the Trump administration’s tax overhaul on economic growth and gave no hint of concern about overshooting on inflation.
Several Fed policymakers have said they expected the tax changes, which include an estimated US$1.5 trillion in corporate and individual tax cuts, to provide an economic lift by boosting business and household spending.
The economy grew 2.3 percent last year.
There were no dissents in the Fed’s decision on Wednesday.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
United Microelectronics Corp (UMC, 聯電) forecast that its wafer shipments this quarter would grow up to 7 percent sequentially and the factory utilization rate would rise to 75 percent, indicating that customers did not alter their ordering behavior due to the US President Donald Trump’s capricious US tariff policies. However, the uncertainty about US tariffs has weighed on the chipmaker’s business visibility for the second half of this year, UMC chief financial officer Liu Chi-tung (劉啟東) said at an online earnings conference yesterday. “Although the escalating trade tensions and global tariff policies have increased uncertainty in the semiconductor industry, we have not
RSS