With the US economy expanding at a respectable pace, companies hiring and consumers inclined to spend, Federal Reserve policy-makers can feel comfortable about boosting short-term interest rates for a fourth time this year.
That's the feeling among economists who believe the Fed will stay the course of the current credit-tightening campaign it started in June. Fed Chairman Alan Greenspan and his colleagues want to continue moving a key rate from extra-low levels to more normal ones now that the economy's recovery from the 2001 recession is more deeply rooted.
Despite surging oil prices -- which have retreated in recent days -- inflation isn't an immediate threat to the economy, analysts said. The Fed, however, wants to make sure it doesn't become a problem in the future.
Economists believe the Federal Open Market Committee -- the group that sets interest rate policy in the US -- will increase the target for the federal funds rate to 2 percent from 1.75 percent at its meeting yesterday. An afternoon announcement was expected. The funds rate is the interest that banks charge each other on overnight loans and is the Fed's primary tool for influencing economic activity.
"The economy had been facing two significant barriers or question marks -- slow job growth and high oil prices. Both of those negatives have turned significantly more favorable just within the last week," said Lynn Reaser, chief economist at Banc of America Capital Management.
The economy added a sizable 337,000 jobs in October, the most since March, the government said last week. While the figures were helped by job gains related to hurricane cleanup efforts, they nonetheless raised hopes that the recovery in the labor market, which has been uneven, is gaining some real traction.
Oil prices, which hit a record high of just over US$55 a barrel late last month, settled at US$47.37 on Tuesday.
CSBC Corp, Taiwan (台灣國際造船) yesterday released the first video documenting the submerged sea trials of Taiwan’s indigenous defense submarine prototype, the Hai Kun (海鯤), or Narwhal, showing underwater navigation and the launch of countermeasures. The footage shows the vessel’s first dive, steering and control system tests, and the raising and lowering of the periscope and antenna masts. It offered a rare look at the progress in the submarine’s sea acceptance tests. The Hai Kun carried out its first shallow-water diving trial late last month and has since completed four submerged tests, CSBC said. The newly released video compiles images recorded from Jan. 29 to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to make advanced 3-nanometer chips in Japan, stepping up its semiconductor manufacturing roadmap in the country in a triumph for Japanese Prime Minister Sanae Takaichi’s technology ambitions. TSMC is to adopt cutting-edge technology for its second wafer fab in Kumamoto, company chairman C.C. Wei (魏哲家) said yesterday. That is an upgrade from an original blueprint to produce 7-nanometer chips by late next year, people familiar with the matter said. TSMC began mass production at its first plant in Japan’s Kumamoto in late 2024. Its second fab, which is still under construction, was originally focused on
DETERRENCE EFFORTS: Washington and partners hope demonstrations of force would convince Beijing that military action against Taiwan would carry high costs The US is considering using HMAS Stirling in Western Australia as a forward base to strengthen its naval posture in a potential conflict with China, particularly over Taiwan, the Wall Street Journal reported on Saturday. As part of its Indo-Pacific strategy, Washington plans to deploy up to four nuclear-powered submarines at Stirling starting in 2027, providing a base near potential hot spots such as Taiwan and the South China Sea. The move also aims to enhance military integration with Pacific allies under the Australia-UK-US trilateral security partnership, the report said. Currently, US submarines operate from Guam, but the island could
The partisan standoff over President William Lai’s (賴清德) proposed defense budget has raised questions about the nation’s ability to adequately fund its own defense, the US Congressional Research Service (CRS) said in a report released on Tuesday. The report, titled Taiwan: Defense and Military Issues, said the government has increased its defense budget at an average annual rate of 5 percent from 2019 to 2023, with about 2.5 percent of its GDP spent on defense in 2024. Lai in November last year proposed a special budget of about US$40 billion over eight years, and said he intends to increase defense spending to
RSS