US Secretary of the Treasury Janet Yellen on Sunday said that US President Joe Biden’s US$4 trillion spending plan would be good for the US, even if it contributes to rising inflation and results in higher interest rates.
“If we ended up with a slightly higher interest rate environment, it would actually be a plus for society’s point of view and the Fed’s point of view,” Yellen said in an interview with Bloomberg News during her return from the G7 finance ministers’ meeting in London.
The debate around inflation has intensified in recent months, between those like Yellen who argue that current price increases are being driven by transitory anomalies created by the COVID-19 pandemic — such as supply-chain bottlenecks and a surge in spending as economies reopen — and critics who say trillions in government aid could fuel a lasting spike in costs.
Biden’s packages would add up to about US$400 billion in spending per year, she said, adding that it is not enough to cause an inflation overrun.
Any “spurt” in prices resulting from the rescue package would fade away next year, she said.
“We’ve been fighting inflation that’s too low and interest rates that are too low now for a decade,” the former US Federal Reserve chair said, adding that “we want them to go back to” a normal interest rate environment, “and if this helps a little bit to alleviate things then that’s not a bad thing — that’s a good thing.”
The headline measure of consumer prices rose 4.2 percent in the 12 months through April, and the numbers for last month are due to be published on Thursday.
The Fed has committed to only start scaling back the US$120 billion monthly pace of its asset purchases after there is “substantial further progress” on inflation and employment.
US job growth picked up last month — along with workers’ pay — and the unemployment rate fell to 5.8 percent, a US Department of Labor report on Friday showed.
Asian stock markets were mixed yesterday as investors mulled comments by Yellen on interest rates and weighed the impact of the G7 global tax plan on tech giants.
Hong Kong was down 0.7 percent, Sydney was off 0.2 percent and Taipei slipped 0.4 percent.
Tokyo trimmed earlier gains, but still closed up 0.3 percent, Seoul added 0.4 percent and Singapore was 0.7 percent higher, while Shanghai recovered from an early dip to end 0.2 percent higher.
Additional reporting by AFP
‘FINGERPRINTING’: The ‘private relay’ feature hides a user’s IP address by rerouting the Web connection through a third party, making it impossible to infer their identity Apple Inc on Monday said a new “private relay” feature designed to obscure a user’s Web browsing behavior from Internet service providers and advertisers would not be available in China for regulatory reasons. The feature was one of a number of privacy protections Apple announced at its annual software developer conference on Monday, the latest in a years-long effort by the company to cut down on the tracking of its users by advertisers and other third parties. Apple’s decision to withhold the feature in China is the latest in a string of compromises the company has made on privacy in a country
SUPPLY CHAIN RESHUFFLE: The chipmaker was ‘cautious’ in not making commitments too early in building production in the US, citing ‘geopolitical factors,’ Nikkei Asia said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is considering building an advanced IC packaging plant in the US following a massive investment to set up a wafer fab in Arizona, Nikkei Asia reported. TSMC was considering the plant in response to “Washington’s desire to bring more of the tech supply chain onto home turf,” the report said. TSMC increasingly faces the need to expand in the US, which accounts for about 62 percent of its total sales, Nikkei Asia said, citing three sources who declined to be named. The potential US plant would be equipped with the latest 3D stacking technologies to arrange chips
Apple Inc has hired Ulrich Kranz, a former senior executive at BMW AG’s electric vehicle (EV) division, to help lead its own vehicle efforts, people familiar with the situation said. The tech giant hired Kranz in recent weeks, about a month after he stepped down as CEO of Canoo Inc, a developer of self-driving EVs. Before cofounding Canoo, Kranz was senior vice president of the group that developed the i3 and i8 cars at BMW, where he worked for 30 years. Kranz is one of Apple’s most significant automotive hires, a clear sign that the iPhone maker is determined to build a
PLEDGE: The contract chipmaker said it would issue at least NT$2.5 a share each quarter and no less than NT$10 per share for the whole of this year Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its proposed cash dividend for last quarter to NT$2.75 per share from NT$2.5 a year earlier, given the company’s increased earnings. That represents a payout ratio of about 51 percent based on its earnings per share of NT$5.39 in the first three months of this year. TSMC said that its board of directors approved the cash dividend distribution yesterday. The Hsinchu-based chipmaker reassured its investors that it intends to maintain a stable and sustainable dividend policy. The company said that it would issue at least NT$2.5 a share