The US Federal Reserve on Wednesday raised the benchmark lending rate for the second time this year, and signaled it would be more aggressive about rate increases this year and next year amid “strong” economic growth.
Yet, although he acknowledged concern among businesses nationwide about the uncertainty created by US President Donald Trump’s abrasive trade policies, Fed Chairman Jerome Powell stressed that “the US economy is in great shape.”
The unanimous vote the Fed’s rate-setting Federal Open Market Committee (FOMC) brings the federal funds rate to a range of 1.75 to 2 percent, and indicated there would be two more rate increases this year and four next year, one more than previously expected.
Powell downplayed concerns about accelerating inflation, saying that the central bank would not overreact to an expected uptick driven by the recent increase in oil prices and would aim for the rate to hold at about 2 percent for a “sustained” period.
“We know inflation is going to bounce around,” he said. “We didn’t overreact, I think, to inflation being under 2 percent. We won’t overreact to it being over 2 percent.”
The Fed last raised the benchmark in March, the sixth increase since December 2015 as it tries to keep the economy growing at a sustainable pace without fueling inflation.
Rising rates are unlikely to derail economic growth, which the committee now characterizes as “strong” rather than “moderate,” the FOMC statement said.
The Fed would continue to watch prices and employment data closely to gauge the impact of inflation and the trade policies on the economic outlook, Powell said.
The quarterly economic forecasts show central bankers expect the benchmark rate to end the year at 2.4 percent rather than the 2.1 percent projected in March and the median forecast for the end of next year is 3.1 percent, up from the previous 2.9 percent, which signals four hikes this year and next.
The recent tax cuts are expected to provide stimulus to the economy, Powell added.
However, the FOMC’s economic growth forecasts were little changed, with this year’s GDP seen rising 2.8 percent rather than 2.7 percent, but unchanged at 2.4 percent for next year and 2 percent for 2020.
The already historically low unemployment rate is projected to fall even further, ending the year at 3.6 percent before settling at 3.5 percent next year and in 2020.
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
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.
Hypermarket chain Carrefour Taiwan and upscale supermarket chain Mia C’bon on Saturday announced the suspension of their partnership with Jkopay Co (街口支付), one of Taiwan’s largest digital payment providers, amid a lawsuit involving its parent company. Carrefour and Mia C’bon said they would notify customers once Jkopay services are reinstated. The two retailers joined an array of other firms in suspending their partnerships with Jkopay. On Friday night, popular beverage chain TP Tea (茶湯會) also suspended its use of the platform, urging customers to opt for alternative payment methods. Another drinks brand, Guiji (龜記), on Friday said that it is up to individual
READY TO BUY: Shortly after Nvidia announced the approval, Chinese firms scrambled to order the H20 GPUs, which the company must send to the US government for approval Nvidia Corp chief executive officer Jensen Huang (黃仁勳) late on Monday said the technology giant has won approval from US President Donald Trump’s administration to sell its advanced H20 graphics processing units (GPUs) used to develop artificial intelligence (AI) to China. The news came in a company blog post late on Monday and Huang also spoke about the coup on China’s state-run China Global Television Network in remarks shown on X. “The US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon,” the post said. “Today, I’m announcing that the US government has approved for us
RSS