While there are some signs that global and domestic inflation pressures are easing, high prices have spread, making it harder to quell quickly, a top US central banker said on Monday.
Continued strong demand for goods and for workers would keep pressure on inflation — which has hit the highest in 40 years — New York Federal Reserve President John Williams said.
“This is resulting in broad-based inflation, which will take longer to bring down,” Williams said.
Photo: Reuters
Prices soared over the past year in part due to worldwide supply chain snags, creating shortages of key components such as computer chips for vehicles and electronics.
Those issues have been exacerbated by the Russian invasion of Ukraine, which sent food and energy prices surging, and “zero COVID-19” policies in China.
Those supply constraints are easing, while rising interest rates are cooling demand, helping to bring down prices of many commodities such as lumber, which should lower inflation, Williams said in a speech to the US Hispanic Chamber of Commerce National Conference in Phoenix, Arizona.
“Unfortunately, that’s it for the good news on inflation,” he said, warning that those factors “will not be enough by themselves to bring inflation back to our 2 percent objective.”
The US Fed has moved aggressively this year to tamp down demand to help drive prices lower, hiking interest rates five times, for a total of 3 percentage points.
The US central bank has said more increases are coming this year.
“From Main Street to Wall Street ... inflation is the No. 1 concern,” Williams said, adding: “Our job is not yet done.”
Even as supply issues improve, “demand for durable goods remains very high — beyond what can be produced and brought to market,” while “demand for labor and services is far outstripping available supply,” he said.
Still, Williams said he expects the aggressive US Fed moves, along with similar steps by other major central banks, will help to restore balance globally.
“The combination of cooling global demand and steady improvements in supply ... should contribute to inflation declining to about 3 percent next year,” he said.
The US Fed’s preferred index showed that annual inflation slowed to 6.2 percent in August from a peak of 7.0 percent in June.
Williams said he expects US economic growth to be close to flat this year and post modest growth next year, with a slight uptick in unemployment.
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
RSS